Gift Funds, Gift of Equity
I have been considering a gift of equity for my daughter, but do not know what steps to follow. I am also not aware of any extra costs to me. What is your general advice?
March 29, 2004
A gift of your equity in a property can be in any amount that is supported by the appraised value. You enter into a sale contract, and the lender involved will require that you complete a gift affidavit explaining the extent of your gift and certifying that repayment is not required. Your daughter will then be given credit for that amount as a down payment in the transaction.
If the gift exceeds the annual amount you are allowed to give under current IRS rules (I believe it is $11,000), your accountant will undoubtedly recommend that you file a Gift Tax Return, but no federal tax will be assessed until your estate is handled, and it will depend on the situation you leave at that time.
Good luck.
Copyright 2004 #207
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