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P. Simmons
P. Simmons, Lawyer
Category: Real Estate Law
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Experience:  12+ yrs. of experience including real estate law.
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Can our son gift s townhome to us without tax implications

Customer Question

Can our son gift his townhome to us without tax implications for either party? The money for the original down payment we gave him.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  P. Simmons replied 1 year ago.

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They can IF the value of the home does not exceed the gift tax exemption which is $13K

So, example, say that the home is worth $10K ($100K market value and $90K loan)? Since that is less than $13K there is no tax due.

Or, say its worth $20K ($300K market value and $280K loan)? If he is giving it to a couple, then he can deduct $13K x 2 for up to $26K

But if the home is worth more than $26K (the difference between the loan and market value)? He will owe a tax on the difference.

Say its worth $50K...he would owe tax on $24K ($50K - $26K) to the IRS

Please let me know if you have more questions. I am happy to help if I can. Otherwise, please rate the answer so I may get credit for my work.

Expert:  P. Simmons replied 1 year ago.

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Thanks for your understanding

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