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Offer gifts without having the liability of tax

Posted on: 21st Dec, 2005 02:18 am

Our son lost his job and is not able to make the mortgage payments on his home. The amount of the mortgage loan is 150000. We are aware of the fact that we cannot give him the money without having the taxes due on the money. Can he deed the home to us and then we payoff the mortgage loan?

You can offer $1,50,000 as gift to your son without having a tax liability. You will have to file a gift tax return, but you will have to pay the taxes only when you go beyond the lifetime tax exemption limit ($1,000,000). Your son being the recipient, he will not have to make the tax payments. If the lender forgives $150,000 which is the loan amount, then your son will have no obligation towards the mortgage repayment and he will have $150,000 as taxable income.

Merry Christmas :D

Posted on: 21st Dec, 2005 02:36 am
Thanks for your reply jerry; it has helped to ease off my tension. Merry Christmas to you too.
Posted on: 21st Dec, 2005 02:57 am
My husband and I are arranging to buy our first home and we have been offered a gift from my parents in the amount of 10,000 for this. What tax rules come into play with this gift amount?
Posted on: 30th Jun, 2006 06:21 pm

As per federal laws anyone can give up to the annual exclusion amount ($12,000 for 2006) to a person, every year, without facing any gift taxes, and without the recipient owing an income tax on the gifts.

Also any person can give up to $1,000,000 in gifts, total, in his lifetime, before starting to owe the gift tax.
Posted on: 30th Jun, 2006 07:08 pm

In case of a gift transfer, the person offering the gift has to pay the taxes provided the amount exceeds the limit as given by Gawen. So, you need not bother about the tax payments.

A gift is taxable only when its value in addition to the value of the estate goes beyond $2 million for 2006 through 2008. The amount will increase up to $3.5 million for 2009.


Posted on: 30th Jun, 2006 07:53 pm
Will the property tax go up as it would if it was a sale? The property is in California
Posted on: 06th Aug, 2008 12:57 pm
If it was a sell then why are you calling it a gift?

It seemed from your post that the property tax was going to be up. So the tax will go up; no matter whether it is a sell or a gift? However are you talking about gift tax?
Posted on: 07th Aug, 2008 06:13 am
we were going to get a gift of $50,000 from a family member for our mortgage and they signed the gift letter. Now they can only giveus $20,000. We are going to get the rest of the funds from another famiy member. Do we have to get another gift letter signed, or can we just go ahead to notslow down closing?
Posted on: 20th Nov, 2008 10:09 am
Hi guest!

I think you can include both the gifts in one gift letter. But you should inform about it to the lender.


Posted on: 21st Nov, 2008 02:23 am
Hi all,

For the year 2009, the IRS has increased the annual gift tax exemption limit to $13,000 per year, per person. A married couple can offer a gift of $26,000 to a recipient without having to pay the gift tax. Apart from this, any person can give up to $1,000,000 in gifts in his lifetime, before incurring any gift tax.

The IRS gift tax exemption limit also restricts the amount of money that can be placed in a college account for a child in any single year. This implies that one has to pay gift tax if his college account funds exceed the specified limit. However, Section 529 plan allows a person to offer gifts worth five years of their annual gift exemption into the plan in one shot. However, they cannot offer additional gifts to that child within the following five years.

Take care.
Posted on: 01st Aug, 2009 03:02 am
I am planning to buy my first home in the US pretty soon. My parents do not live in the US and they are going to send me the money for the purchase, the amount could be as much as $300k. I live in the US and I am not a US citizen.

Do I have any tax liability in this case?
Posted on: 28th Aug, 2009 02:45 pm
You will have to show the lender a gift letter stating that you received the money from your parents as a gift.
Posted on: 03rd Sep, 2009 08:05 pm
As Sara noted above, anybody is allowed to give anybody a gift annually of $13,000 with no tax liability.
So, a mother could give a son $13,000 and the father could give the son $13,000 and if the son were married they could each give his wife $13,000 also.
This is September, so, you could actually give him $13,000 now, from the mother and father, and the new year is not too far away and in 4+ months you can give the same amounts for next year.

I'm sure all that covers more than he needs and you probabaly do not plan to give him all that is allwoed.
Posted on: 04th Sep, 2009 11:11 am
Would there be tax implications if i was gifted 50,000 by my parents in 2009?
Posted on: 21st Sep, 2009 01:35 pm
Hi john,

Your parents are liable to pay gift tax on the amount of money they gifted you. The annual gift tax exemption limit for the year 2009 is $13,000. So, your parents will be liable to pay tax on the amount of $37,000. However, a person is also entitled to a life time gift tax exemption limit of $100,000. Thus, your parents will not have to pay any taxes for the gifted amount. The taxes will be adjusted with the annual as well as the lifetime gift tax exemptions.
Posted on: 13th Oct, 2009 11:59 pm
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