Gift Tax in Florida?
Appraisal=$245,000
Selling for=$116,000
GOE= $129,000
This will allow me to bring in zero money down and dropped our interest rate tremendously. Having said that, I don't want to harm her in anyway with paying alot of gift tax.
Answers:
She can give you and your spouse each up to $12,000 for a total of $24,000. Unless you want your children to be on the deed of the house with you, and own part of your house (usually a very bad idea), she cannot gift equity to the grandchildren.
For the other $105,000, she will be required to file a gift tax return. Unless she has given a lot of gifts that required gift tax returns in the past, this will not be enough to trigger a gift tax.
Another way to do this which could avoid the gift tax return all together, would be for MIL to give you and your spouse $24k this year, and then hold a second mortgage on the home for $105k. Each year, she could gift you and your spouse $24k of principal and interest payments.
She would have to pay income tax on the interest she 'earned' from the mortgage, but at 6%, the most the interest would be is $6300 in a single year, which would result in an income tax that could be less than $1000, or possibly as much as $2000, depending on her tax bracket. If you didn't want her to pay, you could gift that money back to her.
Following this strategy, it would take 6 years to gift you the entire mortgage amount, at an interest rate of 6%.
Depending on what else MIL has in her estate, gifting a mortgage may be a better option than filing a gift tax return. MIL should consult with an estate planning attorney to determine what option would be the best for her situation.
33 percent I beleive
A gift tax return needs to be file for any gift over $12,000. As you are married, she could give you each $12k for a total of $24k
Unless she has made a lot of gifts in the past and used up her lifetime credit, she probably will not owe any gift tax.
She will probably end up sending in a Gift Tax return with a balance due of $0.00.
the mortgage broker wants her to?
you answered your question in the first sentence. If she sells you the house she sells you the house. She is giving you a great deal, but not giving you money. Just draw up the loan for the amount you are paying for the house. I'd guess the broker gets a percentage of the amount he wants to claim as a gift??
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