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Hello JA Customer,
Your question has been transferred to the US tax forum to be addressed.
First, there is a misconception that gifts over $13,000 annually are taxable. That is not the case. Under current law, each taxpayer may give up to $1 million in gifts during their lifetime before they actually owe any gift tax. There is an additional $13,000 annual exclusion which does not even apply or reduce the $1 million lifetime limit. Gifts which exceed the $13,000 annual exclusion must be reported by the giver of the gift by filing Form 709 with the IRS which is a gift tax return. However, no gift tax is actually due until that taxpayer has used up his allowed $1 million lifetime exemption.
So if your parents were to give you a gift of £300,000 (which is approximately $458,000 US dollars), they are still below their allowed tax free lifetime gifts of $1 million each. They would simply need to file Form 709 and report they gave a gift of $458,000 (which would be $229,000 from each of them). This would then reduce the amount they each could still give in their lifetimes down from $1 million to $771,000 before any gift tax would ever be due.
That being the case, you do not really need to set this up as a loan. Your parents simply need to file form 709 and report the amount of the gift they have given you, and that will be the extent of their obligations and no tax will be due.
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