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As you are well aware, when you take money out of your 401(k) plan you will have to pay tax on that money, plus a 10% penalty if you withdraw before age 59.5
You can give your mom the money to fix up her house, or fix her house up for her. For this gift, there is no reporting requirement if you gift less than a value of $14,000
If you gift more than $14,000 you will need to file a gift tax return, although no gift tax will be due unless you have already used up your $5.2 million lifetime credit
Typically, when you give a gift the person giving the gift has to pay a tax on it. $14,000 per year, per person, is excluded from this amount. Also, the IRS allows you to gift up to $5.2 million during your life without paying the gift tax.
So, no tax will be due on this gift, but there may be a reporting requirement depending on how much you gift
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Just to clarify for me. I can gift as much as I want as long as it does not go over $5.2 million and as long as it is a gift I will not have to pay tax on it, only the 10% penalty for early withdrawal?
The repairs will be around $20,000.00 so I will not have to pay tax on the $6000?
One more question. I have already withdrawn a certain amount of money for personal uses and was told I could not withdraw any more money in this manner. Is this true and do I have to file separate paperwork to get additional funds for the house repairs?