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house as a gift,tax question
We recently had our offer accepted on foreclosed home. My Mother wanted to purchase the house for my and my DH as a gift, it was paid in cash. How do think it would be best to handle the tax used for gifts? I think in MI you can gift somebody up to 10,000 without claiming it on your taxes. The house was 56,000. Do you think it would be best to keep the house in my Mother's name? She doesn't really want to do this but I don't want her to pay $25,000+ on a gift she gave us. Any advice or similar stories would be appreciated.
Also, the house needs a lot of repairs I was planing on applying for a MSHDA loan to help cover some of the repair costs. Can I even do this if we leave the house in her name? I'm thinking probably not.
We;re going to call the relater's office to see if they have any advice just looking for feedback until the morning.
Re: house as a gift,tax question
Your mom should talk to an accountant on how best to handle the tax consequences.
You did not have money to buy a house and you do not have money for renovations. Are you really ready for home ownership?
This does not sound like it was thought thru very well.
Talk with a local bank or credit union about your options for loans. You will need the house in your name in order to do any home related loan such as a HELOC etc.
You'll have to check with an accountant, but I'm pretty sure she can sell it to you for $1. There will be fees invovled with the transfer of title, lawyers etc. But it's best to have the house in your name.
You guys need to talk to an accountant or lawyer who handles these issues. While it is super generous of her, it would suck if it came back to bite her, or you and your DH, in the butt. I would think that it would be you, as the recipient of the gift, who would be responsible for paying the gift tax.
I also think it may be good for you to talk with a financial planner in order to figure out the smartest way to pay for renovations to the house.
Wow! High and mighty, much? Did I say that I didn't have money to buy a house? No! My mother recently came into some money so she wanted to help me and my DH out. I did not ask her for 1 penny of help. If I had extra money I would do the same for my (future) kid.
After researching last night we will probably just "buy" the house from her and she'll move it into a quick deed,(I think this is the name of it). Still waiting to hear back from the real estate attorney.
If you had the money to buy a house, why do you need to borrow money for the renovations if your mom is buying the house for you?
The receiver of a gift does not pay the taxes if there are any. The giver pays the taxes.
When you do not give the whole picture, you leave things open to speculation.