Gifting funds to purchase home

[frankie123]

I need a little clarification on this subject. Have a client that said Real Estate Brooker told here son she could gift him $100,000 for down payment on a home. At that price he must be buying a mansion. I have looked it up on IRS site and there is double talk there. Stating ..as of 2018 parents can contribute a collective $30,000 to help with down payment, other family members $15,000. Then the next paragraph states, In many cases there is no limit on the amount of gift money that can go on down payment but it will cut into that lifetime amount. Is this possible?

Along the same line we have another client who sold her home gifted $70,000 to her son who in turn built an apartment over his garage for his mother to move in.to and $28,000 which he had a sun room built with. Is there any gift tax to this and if so who pays it.

Thank you for any light anyone can shed on this subject.

[Rapid Robert]

The $15K is simply the amount that can be gifted each year from one person to another without reporting it to IRS. Larger amounts generally do not create an immediate gift tax liability, but do use up the donor's lifetime credit (which is why they have to be reported). It only matters if the donor is going to die with many millions in their estate ($5M, $11M, whatever it is in the future).

You must lead a very sheltered existence if you think a $100K downpayment indicates purchase of "a mansion". More like, $100K down payment on a $500K 2-bedroom condo in top urban markets.

You are asking some very basic questions about the gift tax, so suggest you view section of TheTaxBook, and also see IRS Pub 950. Introduction to Estate and Gift Taxes

https://www.irs.gov/pub/irs-prior/p950--2011.pdf

[Dude]

Buy more $100k mansions just for the appreciation and return rate on rental income alone. Put down the lowest amount possible. Int rates are low enough to create better opportunities for that money.