What is the name of your state? Illinois
My Parents have 130K invested in my brothers home w/ him.....he just did a 40K cash out refi in order to give me 20% downpayment for my house. My Parents are on title but not on mortgage w/ him so the money was cashed out in his name. My mortgage guy said for him to get a cashiers check and make it from him, to me and then I just give the check directly to the builder and we sign a gift letter provided by the mortgage company stating that I dont have to re-pay the obligation of the 40K. Now my questions are as follows: Is my brother allowed to Gift me 40K without incurring any gift taxes? WIll the mortgage company report the gift to the IRS? Should he first sign ghte check ovr to my parents and then they in turn gift me the money? WHat would be the best way to execute this transaction w/out incurring any gift tax?
My Parents have 130K invested in my brothers home w/ him.....he just did a 40K cash out refi in order to give me 20% downpayment for my house. My Parents are on title but not on mortgage w/ him so the money was cashed out in his name. My mortgage guy said for him to get a cashiers check and make it from him, to me and then I just give the check directly to the builder and we sign a gift letter provided by the mortgage company stating that I dont have to re-pay the obligation of the 40K. Now my questions are as follows: Is my brother allowed to Gift me 40K without incurring any gift taxes? WIll the mortgage company report the gift to the IRS? Should he first sign ghte check ovr to my parents and then they in turn gift me the money? WHat would be the best way to execute this transaction w/out incurring any gift tax?
