If you are a parent considering gifting a down payment to your children or a child considering accepting a down payment from your parents, you’ll want to check out this recent article from The Wall Street Journal.
Answering questions regarding tax implications for money given from parents to children for home purchases, this quick Q & A provides helpful info for you.
According to the article, “The tax implications differ depending on whether the money is a loan or a gift, according to Chad Bordeaux, a certified public accountant and certified fraud examiner in Lake Wylie, S.C.”
What to Be Aware of: If parents give a child money as a gift of more than $100000, the child has to declare it on his or her tax returns that year. On the other hand, the problem with it being a loan is that mortgage lenders may be reluctant to lend the balance of the purchase price.
For more information, see the original article, “Tax Implications When Parents Gift Down Payment.”