DEAR BENNY: My question concerns our gift to our son and his wife. My husband and I paid $28,000 for the downpayment on the house they bought in 2008. We paid it by a money order directly to the lawyer handling the transaction. Does our son owe any gift taxes on the $4,000 that is above the $24,000 gift amount that was allowed in 2008? The loan is in my son’s name. The house is in both of their names. –Priscilla

DEAR PRISCILLA: The additional $4,000 above the $12,000 per gift that you made to your son and his wife is not taxable to them. It may have tax implications for your estate on your death. According to our federal tax laws, the donor (you and your husband) are responsible for any tax involving a gift. Discuss your specific situation with your own financial adviser.

Note that as of Jan. 1, 2009, the annual exclusion is now $13,000.

DEAR BENNY: My question concerns our gift to our son and his wife. My husband and I paid $28,000 for the downpayment on the house they bought in 2008. We paid it by a money order directly to the lawyer handling the transaction. Does our son owe any gift taxes on the $4,000 that is above the $24,000 gift amount that was allowed in 2008? The loan is in my son’s name. The house is in both of their names. –Priscilla

DEAR PRISCILLA: The additional $4,000 above the $12,000 per gift that you made to your son and his wife is not taxable to them. It may have tax implications for your estate on your death. According to our federal tax laws, the donor (you and your husband) are responsible for any tax involving a gift. Discuss your specific situation with your own financial adviser.

Note that as of Jan. 1, 2009, the annual exclusion is now $13,000.

DEAR BENNY: My father recently passed away, and my mother is going to live with us. We are moving for job purposes and are planning to buy a larger home to accommodate everyone. Like many Americans, our current home is worth less than our mortgage, and my mother will gift us the $100,000 for a 10 percent downpayment. We will cover the monthly mortgage and mom will live under our roof. Can we avoid having mom on title to protect her and gift taxes? –Jana

DEAR JANA: Because I am not an accountant, you would be well advised to seek guidance from a financial professional. However, I do have a suggestion. Instead of gifting you the $100,000 (which may have tax implications for her), your mother should lend you this money. The loan will be secured by a second deed of trust (mortgage) on your property; the first mortgage will be the one you get from a commercial lender.

You will have to clear this arrangement with your mortgage lender. If approved, then every year your mother can gift up to $13,000 of the loan (i.e. reduce the balance owed) to you and another $13,000 to your husband.

You may also want to discuss with your financial advisers a concept called "SCIN" — a self-canceling installment note. This is somewhat complicated but may be a useful tool for all parties.

DEAR BENNY: I am on the homeowners association board in a housing development that is about 10 years old, and residents are covered by covenants that were written at that time. There are no flagpoles, no outside antennas and no basketball hoops allowed (unless they are portable), and no tool sheds or other outbuildings, etc., allowed.

As you can guess, there are several flagpoles flying U.S. flags and basketball hoops on poles cemented in the ground that no one has ever challenged. Now a resident (a lawyer) has put up a shed and tells us he will not remove it because there are other covenant violations that are of long standing.

He further states that he will counter sue the board if we try to take him to court, since we are now being selective in how we administer the covenants. In your experience, where do we stand? …CONTINUED

We have been told it is extremely difficult and costly to revise the covenants because it would require a super-majority of all residents to approve any changes by notarized signatures. This would be very difficult, as it is almost impossible to get even a small number people to do anything of common interest in our development. –Dean

DEAR DEAN: I don’t know whether your state — or your documents — requires notarized signatures, but you are correct that it usually takes a super-majority of all owners to amend your legal documents.

There is case law throughout the country that may assist you. Courts have held that although there may be numerous covenant violations within a community, if a board decides to start enforcing the covenants — and if that enforcement is universal and not selective — the courts will not interfere.

Furthermore, I have read some cases where the courts distinguish one violation from another. For example, just because homeowners have violated the covenant about basketball hoops does not mean that another owner can get away with violating the "no-shed" rule.

You really should get a legal opinion from your association attorney.

DEAR BENNY: I requested an interest-rate reduction from my lender. I sent the request because I felt I could qualify given my situation and credit ratios. I am not behind or late on my mortgage, but have found that since I mailed this request I am no longer receiving my regular monthly mortgage statement. However, I am receiving constant notices referencing that I am late and behind on my mortgage — which I am not and have never been.

In regards to my request, the bank said that I qualified but would offer me only a 40-year mortgage instead of a rate reduction. I’m not willing to take this, as it’s just going to cause me to pay more interest over the long haul.

In regards to the late notices, I called my lender and inquired about why I’m receiving these incorrect notices. The customer service rep told me to disregard (the notices), but had no explanation. I requested the lender send my monthly statements, but now the lender just sends a mortgage coupon rather than my whole mortgage statement. What can I do? –Natasha

DEAR NATASHA: Although you named the bank in your question, I prefer to keep that information out of my response. First, I happen to know that your lender does not send monthly statements but uses coupon books instead. So that’s not a real problem so long as you make the mortgage payment each month on time.

But it clearly is a problem that you are getting "dunning notices" when in fact you are not late.

My suggestion: If your lender has a branch office in your area, go there and talk with a senior vice president. Show him/her the letters you have been receiving and demand that (1) the notices stop, (2) the lender send you a letter of apology and (3) the lender proves to you that no adverse information has been sent to any credit reporting agency. (You should also confirm this by going online and obtaining a copy of your credit reports.)

If that does not work, send a complaint letter to the Federal Reserve Board in Washington, D.C., with a copy to your state’s attorney general and a copy to your lender.

Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. Questions for this column can be submitted to benny@inman.com.

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