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Marvin,EA, Enrolled Agent
Category: Tax
Satisfied Customers: 1672
Experience:  Enrolled to Represent Taxpayers Before The IRS
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How do I avoid paying taxes if my parents buy me a home

Resolved Question:

How do I avoid paying taxes if my parents buy me a home?
Submitted: 8 years ago.
Category: Tax
Expert:  Marvin,EA replied 8 years ago.
Hello and thank you for using Just Answer. If your parents buy a house for you your parents would have to file a gift tax return for the amount they paid for the house. You will not have to pay any taxes on the gift. Will your parents be taking a mortgage on the house or will they pay cash for the house? How much will the house cost?
Customer: replied 8 years ago.
They are paying $202,000 cash for the house. The contract is in their names and my name. We would like the get the title into just my name, and are looking for the best way to do that and avoid any taxes. Thanks.
Expert:  Marvin,EA replied 8 years ago.

You parents will be making a gift to you in the amount of $178,000 and would have to file with the IRS a gift tax return. If a gift in excess of $12,000 is made by one spouse, the couple can use both annual exclusions by filing gift tax returns election to split gifts. If spouses give community or joint property, the gift is considered to be given half by each-it is not a split gift. Your parents have a lifetime $ 1 million gift tax exclusion. The only consequence of the gift your parents will give you will be the requirement that a gift tax return be filed. No taxes will be due on the $202,000 gift. Your parents will file Form 709 ( when the gift is complete.

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