Client gives child who has no investment income 100k to buy house. There is no interest attached to theis transaction. Per IRs rules this is fine. If he makes say a $20k gift in the same year does he file a gift tax showing a $8k taxable gift or a 20k taxable gift? Does the 100k gift loan affect the real gift?
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Client files a gift tax return showing both gifts to the same person and takes his exclusion with the remainder as a gift. Therefore the gifts would be listed as $120,000 (form 709, page 3, part 4, line 1) with his $11,000 exclusion (form 709, page 3, part 4, line 2) leaving $109,000 as a taxable gift.
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