Thanks for your quick reply. Our intention was to give about 100K for them towards their home buying. This way we thought we can give total 84,000 and on the balance 16,000 (we are planning to give separate checks of 14,000 each) we want to give another check and show as loan given to them at 5% interest payable quarterly. is our assumption right?
Thanks. Your answer triggered two questions. If I give more than 14K gift what form I should file. Do I need to pay tax on that later
If I give loan and forgive do they need to pay tax on such forgiven amount
Hi Prasad -
You will file Form 709 US Gift Tax Return. Link to form and instructions below.
There is no tax to pay by you or your children on the gifts given assuming they don't exceed $5,250,000.
If and/or when the loan is forgiven, a gift occurs. If the value of the gift is below $14K no gift tax return is due in that year. If it exceeds $14K a filing will be required, but no tax will be due.