Posted by William Bronchick on February 19, 2002 at 20:09:52:
He will pay no taxes. He must file a gift tax return, which will be debited against his lifetime credit of transfers, which is currently $1m.
the gift of equity - Posted by cindy
Posted by cindy on February 19, 2002 at 08:59:08:
I have applied for a loan of 170,000 for a condo that appraises at 215,000…My friend and I orginally were going to buy the condo together, and I gave him 20,000 towards the down payment but only his name is on the condo and now I want to buy it from him. I have no down payment and so he wants to give me the gift of equity that amounts to about 40,000. He knows he can gift 11,000 without paying taxes, but he is not sure if the rest of the equity gift will result in taxes he must pay. Will he have to pay taxes on the rest of the equity and if so how much is it taxed? Thanks.