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To the OP: Strongly suggest you let your CPA know about adding you and your wife to the deed. Taxwise, IRS will view the transactions this way:
* You and your wife gave your daughter a $330,000 gift when you purchased a house for her. Gift tax was due.
* Your daughter gave you and your wife a gift each of one third of the market value of the home when SHE added your names to the deed. Now she owes gift tax.
You guys have created a serious tax problem for you AND your daughter. Don't ignore the potential problems.
The gift tax means that you report the "gift" to the IRS. We did that. There is no tax due, it only documents the gift to track the cap of a $1 million cap. If that cap is exceeded, then Tax is due. Already consulted CPA on this. So there is / was no tax due and we are unlikely to exceed the cap in our lifetime.
The gift tax means that you report the "gift" to the IRS. We did that. There is no tax due, it only documents the gift to track the cap of a $1 million cap. If that cap is exceeded, then Tax is due. Already consulted CPA on this. So there is / was no tax due and we are unlikely to exceed the cap in our lifetime.
What about your daughter now that she has gifted you and your wife 2/3rds of the current market value of the house?
Thanks to current laws, it doesn't matter one bit if your transaction was legit.......it's the bank that has to decide if it passes the smell test. They had plenty of reasons to shut it down, and that is exactly why I said,"I am not saying that is the case here." Banks are held accountable in more ways than have been presented in this forum, and they are even prosecuted for transactions they cannot defend. It's not just the institution they go after any more, it's also the individuals involved. I'm not paying a fine or doing time for anyone's loan........I don't get paid enough for that.
I am of the firm beleave that anyone buying a house with cash is a big red flag. I went through this , we built our 400,000 home with cash over five years ago. We had applyed for a mortage after the home was bilt and paid for. Turned down four times, we then tryed for a reverse mortage, thinking that might work. The RM people , after applying to three other RM loan folks finally came through this year after Four years of trying to make it work. ( ordinary loan mortage people saw our paid in full a red flag , then so did the R M people) We were about to give up altogether , after all these turndowns, somehow it finally came through). I still think the cash issue had a lot to do with the banks not wanting to loan us back some of our savings in order to build. ( four years ago getting a construction loan was impossible at best)
Thanks to current laws, it doesn't matter one bit if your transaction was legit.......it's the bank that has to decide if it passes the smell test. They had plenty of reasons to shut it down, and that is exactly why I said,"I am not saying that is the case here." Banks are held accountable in more ways than have been presented in this forum, and they are even prosecuted for transactions they cannot defend. It's not just the institution they go after any more, it's also the individuals involved. I'm not paying a fine or doing time for anyone's loan........I don't get paid enough for that.
40% of homeowners in america own their homes free and clear. If some of those 40% sell there homes and purchase a new one, how do you think they're going to likely pay for it?? CASH!
Since when is purchasing a home for cash a suspicion of a crime? It's done every day! I didn't find my cash in a suitcase someplace, I worked my a** off and saved every penny for twenty years! I sacrificed for years and years, as owning my home free and clear was a dream. We are not all little mortgage groupies! Some of us think outside the, "paying the bank $800,000 in interest of thirty years on a $300,000 purchase is a great idea" box!
I heard it for years, why would you want to pay off your house, invest in other things you could make more. Those folks are broke! I own my home!
I understand given the times we live in, some of the responses provided here, but seriously it's rediculous that buying a home in a less then orthodox manor, but perfectly legal, causes so much scrutiny, envy and suspicion!
And of those 40% of homes paid with cash, how many are closed in someone else's name? Not a trust, but another individual? I stand behind my original opinion, the reasons were there.
And of those 40% of homes paid with cash, how many are closed in someone else's name? Not a trust, but another individual? I stand behind my original opinion, the reasons were there.
Well I got the loan through a local credit union. Not sure if you read that or not on Saturday. I wrote a letter of explanation, their title department looked into it and the approved the loan. I did the same thing with BOA, but they didn't "look into it" until underwriting. We showed home ownership free and clear dating back to over ten years and three different homes. They knew where the "cash" came from and had no issues with it.
Its a crazy world out there, only the strong will survive the turmoil, corruption, theft , securities fraud , deception , and just plain outright lies ! The last 5 years , cash was king of the roost. many a deal was done during these hard times for millions of people, that verged on outright criminal actions. All this is and was common knowledge, yet , no one went to jail. All the big investment houses that were swapping bundled worthless mortgages just became richer. Now they are at it again as the real estate market heats up. I see the same thing all over again coming to a place near you , stay tuned !.....
Whenever there is a big spread in any brokered market you will see everyone and his brother getting into whatever business it may be, where they can make a quick profit, big money and connections count for a lot. It was a lesson I should have learned long ago , and I did , but as so many ahead of us , we all wanted to catch the brass ring on the circle of steel where you make your bets and win or loose or die trying , that IS life in a nut shell !
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