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Send 2 checks 1) Gift of $15k - tax free 2) Remainder of mortgage - they would have to claim it as a consulting fee on their W2s.

Might trigger audit?

Send 2 checks 1) Gift of $15k - tax free 2) Remainder of mortgage - they would have to claim it as a consulting fee on their W2s. Might trigger audit?

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[–] • 4 pts

To add to what Fumduck said-

If the family “member” is actually a couple and if you are a couple you can each gift to each of them the $15,000 annually.

But also Before you embark on this path study very hard the social/psychological impacts to your relationships. Many times adult dependents become very distraught with their benefactors. And what happens if you pay off their indebtedness and then they go out and buy a new car (for example?). Will you or your spouse then feel betrayed? What is they then get a reverse mortgage on their house? Or refinance the house and take out cash and in turn give that to someone else for say a down payment on a car or house; how will you feel then?

[–] • 0 pt

This is good advice. Most people who have debt will take on more after a windfall because their debt isn't caused by poverty, it's caused by overspending.

[–] • 4 pts

is there no way you could buy out the bank side so you become the lender and therefore you set the interest rate?

[–] • 3 pts

This is likely the best legal way to do it. I'd get a lawyer that also does taxes to write up the mortgage and do the title stuff. It'll make it more legit. You might not be able to set the mortgage rate at zero percent without issues. But then you could gift the max amount over how many years you need.

[–] • 1 pt

I like this idea, will talk to my accontant Tuesday about doing exactly this.

[–] • 1 pt

Goof luck. I know a few people that gifted houses to their children by co-signing loans and paying them, but I'm not sure how they get their name off the title without tax consequences.

[–] • 2 pts

Maybe make them a personal loan, they never repay it,you write it off as bad debt. I’m not a tax accountant tho, you should find a good one.

[–] • 1 pt

This will generate taxable income for them. Bad idea

[–] • 2 pts

No idea what you're talking about.

But I've talked to you before, and you seem like a nice, charitable guy.

You ever thought about setting up a 501c3 Not-for-profit to benefit local homeowners struggling in this unprecedented era of inflation and housing insecurity?

Might be something to look into.

[–] • 1 pt

Everyone in this thread is a retard and has no idea what they are talking about. You have an $11.7 million lifetime gift exclusion, you will not have to pay gift tax. This is on top of a 15k annual exclusion, doubled if you are married. If you are married filing jointly you can give 30k a year without touching the exclusion.

[–] • 1 pt

If you're trying to pay it off in bulk then give them cash. They can then pay it off themselves.

[–] • 0 pt

IRS monitors cash withdrawals totaling more than $10k in a year.

[–] • 0 pt

Depends on frequency and amount. I guess it also depends on how much this loan is too as to how effective it could be as an option.

[–] • 0 pt (edited )

They put those new reporting requirements in this year. Anything over $10k out of a bank account per year, and over $10k in per year (excluding W-2 income) generates a report. Same for cash in and out.

After initially proposing to track bank accounts with more than $600 of inflows or outflows, on the Treasury on Tuesday offered a new threshold. More than $10,000 in transfers in a given year would flag an account for reporting to the IRS, the agency said in a press release. Wage and salary deposits won't count toward that threshold, the Treasury said.

The Treasury proposal would have banks report "gross inflows and outflows with a breakdown for physical cash, transactions with a foreign account, and transfers to and from another account with the same owner."

The proposal is part of a suite of laws that would close the so-called information gap — taxes that the government doesn't know to collect because of income that goes unreported. A vast amount of those unpaid taxes belongs to the wealthiest 1% of taxpayers — by one estimate, $160 billion a year goes unpaid by this group.

[–] • 1 pt

loan them the money unsecured at the minimum allowable interest (i think irs rules are 1.8%/) then gift them the 15k a year to forgive the principle and interest. If you are a married couple you can gift them twice that and you can also forgive the loan upon your death. .

Thirdly, you can buy their home and gift it to them as part of your estate but it will still factor into your estate for tax thresholds (currently 10 million)

[–] • 1 pt

FWIW, a CPA is the Right source of information (I'm in the middle of similar) about how to do this. Lawyers, unless they specialize in tax law, aren't going to be much use.

In my case it's under $60k and can be covered by my spouse and I and with another married couple. But using several people to get the $$$ up would be the technical answer based on what I've learned. Can't do it in one year because there aren't enough trusted individuals? Spread it out over a couple/few years.

As for "under the table" gifts, that's a tricky thing for the receiving party (bar of gold, cash gift, whatever). They have to account for where that money came from and/or why there was suddenly more disposable income than previously without a change in income unless they're good at hiding its use. I've been on the receiving end of that before and spread it out over a year with grocery purchases (most cash as that was the gift, some card to keep up appearances). We all know how everyone around us would react if they were given $5k in cash... most would blow it immediately and post about it on social media while never once thinking about the potential consequences/ramifications.

[–] • 1 pt

If there are multiple members off the household, you could write each a check for the maximum tax free amount, I believe. Alternatively you could gift it to another individual, who could then gift it to that family member, though there may be consequences if you’re found out on that one.

Either way, I would double check my suggestion.

[–] • 1 pt

just slap them in the face.... no really

see they can sue you for personal injury, then you settle out of court. Personal injury settlements CANNOT be taxed. Some small court costs and it's done. Don't involve lawyers.

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