Need advice on best way to gift

[wincrasher]

I plan on giving my sister $100k to help her buy a house. Most likely she'll get a $300k house, so a mortgage for the balance. That's a fairly nice house for where we live.

Problem is, what is the best way to go about this? I want to minimize or eliminate tax impact to her and minimze complications getting her mortgage. Underwriters are pretty hysterical these days.

Should I just have a check for her at closing? Give it to her over time? Give it to her now? Be a part owner of the house? Make her an employee? Put it in a trust? Set up a company we jointly own?

[Seeker]

I plan on giving my sister $100k to help her buy a house. Most likely she'll get a $300k house, so a mortgage for the balance. That's a fairly nice house for where we live.

Problem is, what is the best way to go about this? I want to minimize or eliminate tax impact to her and minimze complications getting her mortgage. Underwriters are pretty hysterical these days.

Should I just have a check for her at closing? Give it to her over time? Give it to her now? Be a part owner of the house? Make her an employee? Put it in a trust? Set up a company we jointly own?

Currently, you can legally give a gift of up to 13k per year to any person without generating a gift tax.

These may help:

Frequently Asked Questions on Gift Taxes
Publication 950 (12/2009), Introduction to Estate and Gift Taxes

[ScrimpAndSave]

Um, can I be your sister too?

[jpg7n16]

I plan on giving my sister $100k to help her buy a house. Most likely she'll get a $300k house, so a mortgage for the balance. That's a fairly nice house for where we live.

Problem is, what is the best way to go about this? I want to minimize or eliminate tax impact to her and minimze complications getting her mortgage. Underwriters are pretty hysterical these days.

Should I just have a check for her at closing? Give it to her over time? Give it to her now? Be a part owner of the house? Make her an employee? Put it in a trust? Set up a company we jointly own?

Are you married?

Using the 13k annual exclusion that Seeker pointed out, if you could spread it over some years it would be best. And if you're married, you could see if spouse would agree to split gifts - allowing you to gift up to $26k each year.

But if you want to give it all to her this year - there would likely still be no tax consequences for either of you.

You have a $1million lifetime exemption for just giving things away. So if you gave her $100k this year, $13k would be the annual exclusion and the other $87k would just deduct from your $1 million lifetime exemption (leaving you with $913,000 you could still give away tax free)

If you could spread it out over some years, you would use less of the lifetime exemption - or none if gifted over like 10 years.


But it's likely that there will be no tax implications whatsoever of you gifting your sis this money. Worst case: you give her a check for the $100k, file a 709 and use your lifetime exemption for $0 tax due.

http://www.irs.gov/pub/irs-pdf/f709.pdf