-Yes, this all took place summer 2018.
-We are not on the title, but we have a "notice of interest" with the property. There is no mortgage, the transaction was done in cash.
-They now own the property in full, but we would need to finance the $433,000 to refund their money and get a mortgage in our name. We no longer have cash for a downpayment needed to qualify for financing. The property now appraises for $615,000. The lender says that we will get the loan for $433,000 and have the sellers (parents) give a 'gift of equity' to satisfy the 20% downpayment needed.
- They wouldn't be actually giving us money that we could use or deposit else wear. It would strictly be a gift of equity that would satisfy our need for a downpayment.
I would rather they didn't report it because no money was actually given, it was our money to begin with. But the lender is telling us there is no way to verify/document that that money was ours, contributed in the initial purchase.
I know it's unlikely that the IRS would ever come sniffing about this transaction, but I just want to make sure that in the unlikelihood that they do, everything is legal. That's why I asked if the $100,000 gift of equity could technically be considered a gift for us and our children, so as to not put us over the $60,000 limit per year allowed to be gifted to me and my husband from his parents.
