Home as A Gift

Yes, you are allowed to do this. There are potential tax liabilities in 2 areas at least. Always check with your tax preparer to be sure of any personal tax implications. However, the 2 areas that I see are gift tax and income tax. With the gift tax you and your spouse(if married) can each give a gift to your daughter and her husband (if this applies). By splitting 30,000 over 4 gifts you will most likely eliminate the gift tax implications. As for the income tax for your daughter. If you lower your sales price by $30,000 I do not believe you will have a challenge. However, if you are gifting her 30,000 as a gift of equity that will be an actual gift and could be subject to taxes. It is important when structuring this gift that you consult a knowledgable lender and because tax implications may be affected by conditions outside of your purchase your CPA or tax preparer should be consulted. Hope this helps.

One other item comes to mind in this transaction. If your daughter will be using an FHA loan the typical down payment is 3.5%. Which can be a gift. However, if the transaction is a non-arms length transaction, which your is, and you as the seller and father have not lived in the home, the FHA down payment requirement now jumps to a minimum of 15%. While this may be covered in your $30,000 gift It is an important guideline to be aware of.

I suggest you look at a Inter-Family Transfer. ... Contact a local real estate attorney.Best wishes, Rudi