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| *Ostroff, Fair and Company>>>Renting & Real Estate |
Best way to gift or loan someone money for downpayment for house? |
Whats the best way to gift or loan my daughter $25,000 as a down payment for a house she would like to buy without being hit with a big tax? I would like to avoid having to pay taxes on this money as much as possible. You and your wife may gift her $12,000.00 tax free per year for a total of $24,000.00. Loan the rest, or have another family member gift it to her. You are so generous. What a lucky daughter. Source(s): http://www.irs.gov/irm/part25/ch06s09.ht... Immediate family members can do gifts with no problem. Some lenders may require she have some of her own money into the transaction, depending on what the LTV (loan-to-value) is when she purchases it. You will just have to write a very simple "gift letter" and show the transfer of funds from your account to hers. She then gains that equity in the home or can use it for closing costs/discount points. you should write on the check you are giving her ... repayment of loan in full. like she's borrowed you money and you are now paying it back to her. no taxes. you can't make a loan to her because the bank will assume that you have an interest / could place a lein against the house and they want to protect their interest. gift might be the way to go , but she may have a tax liability. best to double check / get professional guidance. |
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