What are the Tax Implications of Cash Gift to buy a house and what is a legal way to minimize the tax

[Shannon Savage]

[Greg Potter]

Gifts received are not taxed in any way on the receiving party. Gifts given are taxed for the portion that exceeds the IRS yearly gift exemption (which I think is still $13,000). If mom gives you $20,000 this year then she will have to pay a tax on the $7,000 excess. This $13,000 limit if per person, so you can work around it by having mom gift you $13,000, then having her gift your wife $13,000, and for even more money your dad could then gift you and your wife $13,000 each as well. As long as the gifts are broken down there will be no tax.

It is also possible to do a single larger gift and not pay taxes if the giving party utilizes part of their lifetime estate exemption.

Hope this helps.