Ask Terry Questions Gift giving for child’s home purchase

Gift giving for child’s home purchase

By Terry Savage on May 26, 2015 | Housing / Real Estate

We want to give 10 thousand dollars to our daughter to purchase a home. Is a gift tax free and how do we get information on how to do this.

Terry Says:  Yes, you can give any amount, at any time, to any person — without tax consequences. ( If you are very wealthy and have an estate over $5 million, any amounts given in excess of $14,000 annually to any one individual would count against your combined estate and gift tax.)  If you’re not in that bracket, it’s fine to give that gift.

BUT, your daughter will have to acknowledge the source of funds for her down payment was a gift from you.  That should not impact the mortgage process as long as she has good credit and income to justify the loan.  Make sure she gets good credit counseling (00-388-2227) about how to budget for the expenses of home ownership, including property taxes and insurance, and the inevitable breakdown of an appliance.




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