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Gift Tax - Parents Giving Money to Buy 1st Home

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M

mfaust

Guest
My parents are generous enough to help me with my 1st home purchase. They would like to give me the 20% I need to put down on the house. That 20% is over the allotted $20,000 ($10K each) the Feds allow them to give me without having to pay a gift tax. Is there anyway we can get around this?

Thanks for your advice.
 


L

loku

Guest
Gift tax exclusion

The $20,000 you mention is the annual exclusion. If your parents give you more than that amount, they are required to file a gift tax return; however, they can apply part of their “UNIFIED CREDIT” against the excess over $20,000. The Unified Credit is a lifetime credit that a persona applies against the gift tax and the estate tax. The amount of the credit taken against the gift tax is subtracted from the credit when applied against the estate. The credit that each person can take over a lifetime is enough to shield $675,000 of gifts or taxable estate. That amount is scheduled to be increased over the years.

The end result is that they will pay no gift tax on this gift.
 
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