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I have a parent with whom I've held a joint bank account for several years who wants to give me substantial assistance on a home down payment. Considering my name is also on the account, can I just have the bank in question issue a certified check in my name for the home down payment, or do I need to go through the official "gifting" channels, which I believe would make it subject to taxation.
If its not your money then its a gift. The account will also be one name as major holder of the account with the other(s) just authorized to do business. I am on several accounts as authorized but not the real account holder or is the money mine.Very common in case of emergency.Might want to look into gifts and taxation in IRS search.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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I would protect the relative's interest in your property by forming a 'Shared equity' ownership, or writing a Real Estate Contract with minimal interest and be sure to have the relative named as ADDITIONAL INSURED on you insurance. The IRS has a rule for minimal interest, but it must be REALLY low to exclude the banks that are currently profiting from their many sins.
I think the gift limit is $14k, so the relative could gift you that much / yr till they have you 'paid-off'.
I have a parent with whom I've held a joint bank account for several years who wants to give me substantial assistance on a home down payment. Considering my name is also on the account, can I just have the bank in question issue a certified check in my name for the home down payment, or do I need to go through the official "gifting" channels, which I believe would make it subject to taxation.
Since you are talking about a 'downpayment', one must assume that you are financing the property and will have a mortgage. One of the things the bank will ask you during this process is, "Did you borrow any part of the downpayment." Somehow, you either need to justify that this money is not borrowed (and thus, not a loan)...which, under the circumstances, seems to make it a 'gift' ... since you would not be asking the 'name on the account' question, if it was already your own money. As such, the 'gift' is legally subject to 'gift taxation laws.'
its a tax questio has to whether or not she has to claim the gift if itsd not her money. Not now to possibly get away with it but it be illegal as unclaimed income form a gift. bascailly it depedns if the money is her or if its a gift which she say is a gift and the reaosn for asking.
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