Buying cash then getting a recoup loan tax implications

[Alejandro Arciniega]

Hi Guys and Gals! Thanks in advance!!!

My wife and I have been getting beaten out by cash offers left and right. The only way to be competitive in our market (So-Cal) is with a cash offer. My mother in law has some cash she is willing to put down the cash to get us in and close a deal. I've talked to my lender and she has a product called a "Cash recoup loan". Basically we can refi within 90 days and pull 80% out of the property to pay back mom. My question is, what kind of tax implication are we going to run into?  

We plan on putting mom on the title along with us, then pull the money out, giving it to mom and then doing a quit claim deed.  Will she need to pay taxes on the money we give her from the refinance?