And us not have to pay taxes on it. They are writing the check themselves to the bank holding our loan...so they are technically not GIVING us the money in so many words. Is that legal or does that still fall under "gifting". They can only gift us 10,000 each a year without penalty
2007-04-20 05:14:18 · 8 answers · asked by heathjs21 2 in Business & Finance ➔ Renting & Real Estate
You are definitely receiving the money. You're getting full benefit of not having a mortgage anymore.
Check with a CPA, but as I understand the gift tax, you keep track of it while they're alive, but don't pay tax until they die, and then only if their estate is in excess of X amount, like a million dollars or something.
Just call a CPA to make sure. It's certainly worth a couple hundred bucks to make sure it's done right.
2007-04-20 08:13:00 · answer #1 · answered by Yanswersmonitorsarenazis 5 · 0⤊ 0⤋
Technically yes it IS a gift. And it might be simpler if each parent wrote a check to each of you.
Each parent can give each of you $12,000 per year without filing a gift tax return. That was the limit for 2006 - it might be up a little more for 2007. If the payoff amount is more than that, they could either wait until next year to pay off another chunk, or file a gift tax return. Filing a gift tax return does not necessarily mean that taxes are due. There's not a penalty if they exceed the annual exclusion.
2007-04-20 06:09:43 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
Call the IRS. 800-829-1040. Look in the 1040 instructions to make sure I got the number right. I asked them the same thing.
By us. Do you mean your married? Your parents can give each of you 12000 dollars. Maybe more. I vaguely remember something about splitting their gift. Your parents have to read the instructions for "GIFT TAX".
You don't pay the tax. Your parents pay the tax. Your parents have to file the gift tax form. BUT. Even then they might not have to pay anything. They have a once in a life time tax credit of one million dollars. If, after filling out the tax form their taxable gift is one million or less, they are covered by the credit.
They don't have to do anything if they give you a total of 24 thousand. Maybe more. Your parents should read up on that "Splitting the gift".
Put both your name and your husbands name on the check. And the loan account number.
You should call your insurance man too, and tell him your paying off your house. I think the bank takes care of all the details. But. I would call anyway.
Its not 10,000 any more. Its 12,000. Oops! I just thought of something. I wonder if California has a gift tax?
Writing the check themselves. Hmm. I asked the IRS what would happen if we combined the two gifts to pay off our mortgage. She said we were free to do what ever we want with the money. Have your parents write out a check to each of you for half the mortgage. Void them, and ask your parents to use one of their checks to pay off your mortgage.
Seems reasonable to me!
2007-04-20 06:03:09 · answer #3 · answered by Simple 8 2 · 0⤊ 0⤋
Couple of different things depending on your age/marital status.
Technically they can only GIFT you 12,000.00 each a year. If you are married they can give your spose the same amount.
So for both your parents and for you and spouse you can recieve up to 48,000 a year w/o maxing the gift tax.
The concern i would have is if the payments are made directly to the bank.
2007-04-20 05:32:17 · answer #4 · answered by Red3Biggs 2 · 0⤊ 0⤋
Can only gift 12,000 per year now
Technically, if they're writing the checks and the total per year is over $12,000 they should be taxed for the amount over $12,000.
You can get around things like this via trusts - your parents would need to set that up with an attorney.
2007-04-20 05:19:30 · answer #5 · answered by Anonymoose 4 · 0⤊ 1⤋
taxes are a verry complex thing ie theay owe me 500000.00au dollars in gst it went to court i had them on vido theay still won even though the vidoo shoeed them lying if you deal the w3ay youre talking about you must get a rulling from tax boss himself in writing do not trust them always get aname area take atape recording of the person your dealing with inform them that theay are on tape do theay mindbeing on tape if no is their answer say nomore to that person you might be luckey to if you keep ringing to get somewon to say ok dont talk untill you do get name get time get where there at area is in australia $10000. 00 each year other countrys dont know please take this advice theay are worse than the marfia with out a doubt .rip you off them grubs will ps make sure you get a rulling on this crooks they are belive me please im david p
2007-04-20 05:49:32 · answer #6 · answered by david p 2 · 0⤊ 0⤋
If the mortgage and titling are in your name, it would be a gift.
2007-04-20 05:18:35 · answer #7 · answered by yet_another_realist 3 · 0⤊ 0⤋
Sell house to parents for what is owed. Then they can deed it back to you for $1
2007-04-20 05:21:36 · answer #8 · answered by scotty69nh 2 · 0⤊ 1⤋