Not
@TaxGuyBill, but I think this is the answer:
The issue isn't how the mortgagee receives the money. The issue is whether or not the parents receive anything for their $100K. The IRS defines a gift as a transfer of property (including money) by one individual to another, while receiving nothing, or less than full value, in return. <a rel="nofollow" target="_blank" href="
https://www.irs.gov/businesses/small-businesses-self-employed/gift-tax">https://www.irs.gov/business...>
Therefore, if the parents are receiving nothing for their $100K, they have a reportable gift. Also, the $14K exclusion applies to each of the parents individually. They can thus give a combined gift of $28K without having a reporting requirement.
The gift amount over $14K (or $28K) will count against the parents' lifetime unified credit - currently $5.49 million (2017) - so it's very probable they won't actually have to pay any gift tax, although they do have to report it.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
