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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13160
Experience:  15years with H & R Block. Divisional leader, Instructor
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My mother-in-law gave my wife and I a house in Seattle free

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My mother-in-law gave my wife and I a house in Seattle free and clear. Can I get financing for a portion of it's worth and gift her some money? How much and what are the strings?

Robin D :

Hello and thank you for using Just Answer,
You may make a gift of money to your mother-in-law and would not be required to report the gift as long as you did not give her more than $14,000.

Robin D :

You and your spouse may give her $14,000 each (total $28,000) before you would need to report the gift.

Robin D :

The $14,000 is the limit anyone may gift in one year without being required to report the gift. As your mother-in-law gifted the property to you then she would need to report that as well if the value was more than the limit.

Robin D. and 2 other Tax Specialists are ready to help you
Customer: replied 3 years ago.

I had been told in the past she could give us a one time gift for the full value of the house as long as it was not above current market value.

That is not correct. The gift tax laws state that the gift can not be above the yearly limit. That would mean she could give you each $14,000 but any value over that would have to be reported. That does not mean she would pay tax as there is a lifetime limit (a little more than $5mil) that could be used. The reporting is required but tax is not always due.
I do not know who told you that about the value but they are not correct for tax purposes.