85,000 dollars is a substatial gift.
It would suggest your means are not limited, and a tax consultation would be a wise use of a small fraction of that money (a few hundred dollars at most.)
In general
YOu can give some someone up to 12,000 dollars per year without it being subject to gift tax.
FURTHER.
everyone has a 1,000,000 dollar LIFETIME exemption.
Depending on dads status with his exemption, his estate plan, and tax situation... it is possible ZERO gift tax would be owed.
You are potentially introducing serious complexities to your condo purchase for ZERO tax savings.
Even if gift tax may be owed, it could be less than the costs of setting up the type of tax sheltering mechanism you are talking about.
To do what you propose is not a do it yourself project, you will need a tax lawyer to ensure you are not liable for any issues.
You should also understand that forgiveness of a loan IS A GIFT, and potenially subject to gift tax.
Do you have a partner buying the condo with you? Dad can give them 12,000 also
85,000 gift...
12,000 exemption for you
12,000 exemption for partner
Do you have kids... 12,000 each for themm
potential gift tax
So Dads taxable gift is 73000...
or
61000
right on down...
73,000 dollars is easily covered by dads lifetime exemption, unless he has a substantial amount of future gifts.
For the amount over 12,000 dollars DAD will need to file a gift tax return - that DOES NOT mean he will owe taxes.
YOU will not owe taxes on this gift. You may volunteer to pay the gift tax, but the recipient of a gift is never liable for any gift tax owed.
You need to do two things.
READ IRS Pub 950
www.irs.gov/pub/irs-pdf/p950.pdf
AND
Consult with a tax proffessional you trust.
ADDED:
YOUR MORTGAGE BROKER IS A SALESMAN. He is not a tax pro acting on your behalf. If there are tax issues it will not be his problem. You need tax advice from a competent advisor acting on your behalf. NOT AN INSIDER TO THE DEAL WHO HAS EVERY REASON TO TELL YOU WHAT YOU WANT TO HEAR WITHOUT EXPLAINING HOW IT WORKS AND THE DOWNSIDE. If someone is telling you "Hey no tax liability..."