Posted on: 23rd Jun, 2011 12:16 am
Please help. I have a mortgage which presently has a balance of $45,000. My parents want to help me in paying off this mortgage balance. Though I'm happy with that, I'm concerned with the fact that I will be liable for paying gift tax on such a large amount. Is there any way in which I can avoid paying gift taxes?
Hi Celine,
If your parents gift you the money, they will be liable for paying gift taxes. You won't be liable for paying any taxes for the gifted money received. However, you should also note that your parents can give you a gift of $13,000 each without paying any gift tax. Thus, your father and mother can gift you $26,000 ($13,000+$13,000) without paying any taxes. The rest of the money that they gift you will be taxable.
Take care.
If your parents gift you the money, they will be liable for paying gift taxes. You won't be liable for paying any taxes for the gifted money received. However, you should also note that your parents can give you a gift of $13,000 each without paying any gift tax. Thus, your father and mother can gift you $26,000 ($13,000+$13,000) without paying any taxes. The rest of the money that they gift you will be taxable.
Take care.
It was me above, I just forgot to log in while posting!