Posted by Mark (WV) on February 07, 2002 at 20:16:40:
Thank for responding John,
He got the loan to pay me for what I had in the house plus pull some equity out to pay off some high interest bills.
I had aprox. 18k in the house, the loan was for 25k , the lender cut the check in my name with the instuctions that if I wanted to give any or all back to him it was up to me but they couldn’t cut two checks.
So basicly I gave the house to him for what I had in it there was no profit to me.
The loan was called a gift eqity/purchase loan on their docs.
Posted by Mark (WV) on February 04, 2002 at 22:12:46:
Here’s the scoop, I gave my son a house,He got a loan on it,HUD statement says,
Price $53000 ,gift equity from seller to buyer $28000,Amount due from buyer to seller $25000, and in that lies the question . What is my tax libility here is it the $25000 or the $53000. Minus the amount that I had in the house of course, the broker has cut the check in my name.
My son got the loan to put some bills together and when he asked about the check in my name unstead of his the guy said thats the only way he could make the loan ie as a gift equity /purchase.
Now I had when advised of the loan being did this way realize that taxes would have to be paid on the 25 minus the 18 I had in the house. So on 7 profit it would’nt have been bad but on 35 that going to sting for awhile.
By the way the check will be cashed and given to my son and not used by me.
Posted by JHyre in Ohio on February 06, 2002 at 06:44:39:
What is your basis in the house? Did you give it to him, or are you selling it to him at a discount? Is the loan a purchase loan or just his way of getting at the equity? If you gifted the home to him and nothing more, a mere refi would not give rise to income tax consequences, though the gift itself is reportable on a gist tax return and may reduce your lifetime estate/gift tax credit.