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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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Both me and my wife are green card holders, we are currently

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Both me and my wife are green card holders, we are currently in the process of buying a house. My mortgage advisor recommended to me to apply for the mortgage and write the offer with my name only as my credit score is a little bit higher than my wife, then after closing I can gift her half of the equity, this will save me about $2000 in the closing fees. is there any tax associated or any other complication when I gift here half of the house, the house is about $320000
Submitted: 5 years ago.
Category: Tax
Expert:  Lev replied 5 years ago.

LEV :

Hi and welcome to Just Answer!
While gifts between spouses generally do not have any tax consequences - different rules apply where the recipient spouse is not a U.S. citizen.
A partial marital deduction is allowed for gifts to non-citizen spouses - for 2011 this exclusion equals $134,000.
If you gift more than this amount - you are required to file a gift tax return.
However - the gift amount in your situation is not the value of the property - but your equity which is the total value of the property minus mortgage liability.
Thus if the house value is $320,000 and your mortgage is $250,000 - the value of your gift is ($320,000 - $250,000) / 2 = $35,000 that is within the marital deduction limitation.
Let me know if you need any help.

Customer:

my wife is a green card holder also, so you mean that the gift is actually half of the down payement not the value of the house , is that correct?

Customer:

Hi are u still there

LEV :

Yes - that is correct - the value of a gift which is a subject of liability should be reduced by that liability.

LEV :

For gift tax purposes only matters if the recipient spouse is not a U.S. citizen.

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