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Gift from Grandfather |
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Hello,
My grandfather is purchasing a home for my wife and I. The selling price for the house is $261,000 and someone has told him that instead of titling the house in our name, that he should put it in his name and charge us rent so that the IRS doesn't "hit" him. What are the risk associated with purchasing a home and them giving or "donating" the home to a family member? Thank you. |
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I don't feel qualified to advise on whether the whole idea is a good one or not, because I don't know anything about your situation or your grandfather's. I trust you've all discussed the matter with a lawyer who specializes in estate planning.
But I can tell you that he wouldn't have a "hit" from the IRS. He'd have to file a gift tax return, but no actual tax would be due.The amount he gives you comes off what he could leave at his death with no federal estate tax due. Currently that's two million dollars; it's going to change in the next few years but nobody knows just how. |
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Edith
Originally published on May 10, 2008 |
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