• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Gift Tax

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

scouchy

Junior Member
What is the name of your state? California.

Last year, a friend gave his son $100,000.00 to be used as a down payment so he could purchase his own residence. Now it appears that a huge sum is due because of the "Gift Tax". Is there any way around the tax consequences. They have both agreed now that the money will be repaid when the residence is sold and my friend will also receive 10% profit after the sale. The intent here was to provide enough money for a child to purchase his own residence. Any thoughts??
 


Snipes5

Senior Member
If it was a loan, it should have been drawn up as a loan.

If you give money to a family member and don't property execute it as a loan, it's considered a gift.

Gift tax won't be due, it's just that a gift return will have to be filed, and the "donor" will have used up some of his 1.2 million total allowed tax free estate amount. Tax due on that will still be zero, unless of course said donor has already given away more than 1M.

Snipes
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top