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I would like to loan money to my daughter for her 1st home…

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Hi, I would like...

Hi, I would like to loan money to my daughter for her 1st home purchase down payment. I am taking a line of credit from my home and helping my daughter for down payment. May I know the legal way and are there any tax implication, It is only loan and my daugher will repay ove the 2 to 3 years period

Accountant's Assistant: The Accountant will know how to help. Is there anything else important you think the Accountant should know?

My daughter already finalized a home to buy. I need to transfer the money asap.

Submitted: 3 months ago.Category: Finance
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Answered in 17 minutes by:
3/19/2018
Financial Professional: Lev, Tax Preparer replied 3 months ago
Lev
Lev, Tax Preparer
Category: Finance
Satisfied Customers: 33,115
Experience: Personal Investment, Tax Preparation
Verified

I may suggest to write a formal promissory note with attached repayment plans.

As long as that is a bona fide loan - and there are realistic expectation from both parties that such loan will be repaid - that will not be taxable for your daughter and will not be deductible for you.

Her bank will likely ask to provide that note as a proof of funds and as a source of the money.

You may use any template

Here is just an example

https://www.lawdepot.com/contracts/promissory-note-form

Let me know if any clarification needed.

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Financial Professional: Lev, Tax Preparer replied 3 months ago

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