If you have been wondering how you can help your adult children buy their first home, giving a cash gift may be an excellent idea. I have a close contact who is a tax and estate planning attorney who recommends giving cash gifts to adult children in order to mitigate estate taxes on a regular basis.
If you are a parent who is helping their child buy a home, this generous strategy may be one to consider. If you are able to give, having a tax-free gift can be the difference for the recipient in having enough money to get into their first home, or NOT.
Although there are many low down payment programs available, closing costs are another expense that many first time home buyers do not anticipate or take into account in their calculations. Also, the banks don’t want you to be down to your last dime the day you close on the new home, so having some cash in the bank left over after the purchase is important, too. And while you can’t fix other people’s credit for them, having reasonably good credit is also a weighty factor when it comes to getting approved for a home mortgage.
The Gift of A Home
Here’s a quick story to let you know how I can help you—or anyone you feel comfortable introducing to me.
The value of homes in our area is increasing at levels we have never seen before. In fact, most homes coming on the market are selling in days (or hours!) rather than weeks or months, and these homes are selling for over asking price.
A good friend asked me, “What does this mean for my adult kids – looking to buy their first home?” The answer is different for every family, but you may be able to help them in the form of gift funds. Here is something you may not know:
$15,000 Annual Gift Tax Exclusion
The federal government gives each of us an allowance to gift anybody $15,000 per year without incurring any gift tax; and it’s $15,000 per person. A young couple can receive $15,000 from each parent. Doing quick math, this means they can receive up to $120,000 from both sets of parents.
The next time you are talking with someone who wants to help a person they care about buy a home, there are options we can discuss. My service is designed to find solutions and innovations that help make dreams come true.
Get the Professional Help You Need
Although, as a Shoreline, WA real estate broker I talk with a number of tax accountants, attorneys, and financial planners regularly, I am not certified as any of these things and I would defer to them in a tricky or unusual legal or accounting situation. That being said, it’s good to know what allowances Uncle Sam makes for us when we are trying to share the wealth and help friends and family members. If you would like to discuss strategy and options when it comes to helping those you care about afford the purchase of their own home, I’d be happy to plan a strategy meeting with you to discuss the options.
I’m here to educate and serve. Let me know how I can help.