Parents gift me money tax free for house?

[elving]

What is the name of your state? CA
Hi all, first time here.
My parents have paid off their home and would like to pull some money out of the house in a refi. They want to remodel theirs and give me a large amount of money to buy my first home . Are there any legal or tax issues with this? or is it as easy as just cutting me a check when the funds are available?
Thanks,
Elvin

 

[abezon]

For you it's very easy. Just deposit the check. Your parents will have to file a gift tax return if they gift you more than $24,000 in a year. They likely don't pay any taxes; they just have to file the return.

 

[efflandt]

Since the annual exclusion is $12,000/person/yr, if you have a spouse or partner, the 2 parents could gift the 2 of you $48,000/yr total without any filing requirements. Search for "gift tax" on www.irs.gov and you should also find info about unified credit, which allows lifetime gifts up to $1,000,000 without tax, but the giver has to file proper forms.

 

[elving]

excellent, thanks for the replies, should i see an attorney for the forms for my parents? or have them talk to their tax person?

also, does this require no paperwork at all on my side? i dont have to show the gov't where this large amount of money is coming from?

 

[LdiJ]

excellent, thanks for the replies, should i see an attorney for the forms for my parents? or have them talk to their tax person?

also, does this require no paperwork at all on my side? i dont have to show the gov't where this large amount of money is coming from?

They should talk to their tax person.

Correct, there is no paperwork of any kind for you.

 

[xylene]

Correct, there is no paperwork of any kind for you.

There is no tax paperwork...

If they are getting a mortgage or financing for the house, esp a house bigger than they could afford without the gift, their may be significant paperwork, esp if parents are paying seller or finance company or if they are just giving a big cash (check) to child. (less complex)