Temporary cash advancement
Hi Terry my daughter is selling their home and buying another home. Looking to sell around $200K and she owes $19k on the current mortgage. They need to close by Aug 14th for the new house. To avoid rushing to take the first offer and sound desperate to close we offered to give her $150K for the new home and when she sells the current home she’ll pay us back. This will help her maximize what she can get for her home. How do I deal with the IRS? Thank you very much
Terry Says
You don’t have to deal with the IRS. Nothing to report. This is just a short-term loan that will be repaid — not even a gift. But just pray that all goes smoothly. There is nothing worse than being left with TWO homes, and two mortgages to pay!
If this turns into a gift, you’d likely want to file a gift tax return — as part of your estate and gift tax exclusion. No tax due, just an acknowledgement of a significant gift above the $19,000 annual gift that each of you can make to each of them.
But now that the exclusion is $15 million, you probably won’t even need to do that.
