The Gift Of A Home
No matter the time of year, home buyers often have difficulty gathering enough cash fo they down payment and closing costs.
If you know of a family member who is looking to buy a home in 2018-2019, you may be able to help with the financial aspect of the purchase. any parents, grandparents or relatives offer to provide a tax-free gift to go toward a home purchase.
As the end of the year quickly approaches, remember that a tax free gifts can be made once per calendar year. That means that a gift late in 2018 can be repeated just weeks later in the new year to help build savings for a home purchase in early 2019.
For 2018 and individual can give up to $14,000 in cash to any other individual with no income tax consequences for the donor. Recipients never pay income taxes on gifts, The individual’s souse could also give up to $14,000 to the same person.
In addition, each person could give as much as $14,000 to the recipients spouse. In other words, parents could give a home buying couple up to $56,000 this year ($28,000 + $28,000) with no tax consequences to them. The amount could be doubled by gifts made in 2019. Gift limits often change annually; the limit for 2019 has yet to be announced.
If you receive a monetary gift for a home purchase, bear in mind that your lender will want a gift letter from the giver that explains that the money is a gift and not a loan.
Rules For Down Payment Gifts