Gifting adult son for home down payment
We would like to gift our son some money to help him with down payment for a house.
I understand that there limits to gifting family.
What are those limits and are there benefits drawbacks of gifting money for a home down payment?
Are there any best practices for how to gift this money and any tax implications to be aware of?
Terry Says
There are absolutely no limits on how much you can gift. But if you gift over $19,000 in any one year, you should file a gift tax return. That’s so that over your lifetime you can keep track of any gifts that total over $15 million! Surely, that’s not going to be a problem for you!
There is no tax on the gift to the recipient. And if you wanted to stay under the reporting limit, you could give $19k to him, and a similar amount to his spouse, assuming he is married.
But say you want to give him a larger sum — maybe $100,000. Just write the check. And ask your tax advisor about filing the simple gift tax return. No taxes on this gift at any time.
One more caution: This is truly a gift. Make sure you wont’ need the money in your old age, because it’s not coming back!
