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Pay off second loan or invest cash elsewhere?

Mom needs to weigh gift tax, mortgage interest benefits

The real estate event of the summer
Connect with other top producing agents at Connect SF, Aug 7-11, 2017

DEAR BENNY: I am considering paying off the second loan for my daughter on her house. Are there any tax consequences for either of us? --Anita DEAR ANITA: Currently, under federal law, you have the right to gift your daughter (or anyone for that matter) up to $12,000 annually without filing a gift tax return or paying tax. If your daughter is married, you can also gift up to $12,000 to your son-in-law. And if you are married, you and your husband can each give up to $12,000 to the daughter and son-in-law for a total of $48,000 gift tax-free. The gift in any amount is tax-free to your daughter. However, should you gift her more than the $12,000, there are gift tax implications for you. You will not have to pay any federal tax for this extra gift -- as long as your total lifetime gifts have not yet exceeded $1 million, but you will have to file a gift tax return and it may impact on your estate when you die. This is rather complicated and you should consult your own tax advi...