irs can you give a gift of equity to a child
A good rule of thumb in looking at if a gift tax is going to be paid is the following: each person is allowed to gift any other person $12,000 per year with out disclosure to the IRS. So for parents giving a gift of equity to a child, then each parent can gift $12,000 for a total of $24,000 to that child.Anything beyond that is taken from a $1,000,000 (one million dollar) gift tax exemption over the life of the giving individual. Example: You have a person buying his/her childhood home.herefore each parent can still give that child up to $999,987.00 in gifts over the rest of their lives. Usually gifting rules still apply on gifts of equity, meaning if the total gift of equity is less than 20% the borrower may still have to come up with a 5% down payment from their own resources.