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Buying a new home

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cmstark1

Junior Member
What is the name of your state? Ohio
My wife's grandma recently passed away. She owed $80,000 on a house that was appraised at $119,000. My mother-in-law and aunt are the executor's of the estate. We agreed on a purchase price of $90,000 ($80,000 for the deed and $10,000 to pay for funeral and expenses occured). Our mortgage loan officer is writing up a purchase price of $108,000. This is for the $90,000 owed to the estate and then $18,000 which he said can be gifted back to us from the estate to make major repairs(new siding, new windows, new flooring, etc...) My question is: Will either the estate or us incur any taxes on the extra $18,000? Will we have to claim this as income? Please advise. Thanks. This will be our first home purchase and our only residence. (not a rental property or second home)
 


abezon

Senior Member
What gift? If you take out a mortgage of $108k on a 90k loan, you're just getting a home equity loan for $18k with the purchase. It's the same as buying for 90k & then refinancing for 108k or getting a separate equity loan, except you don't have to pay 2 sets of closing costs. Take the 18k as cash & keep it simple.

Frankly, if the estate gets 108k for the house, it has to declare the extra 18k as an estate asset & distribute it among the heirs in accordance with the will.
 

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