Hello all,
I am purchasing a home for my mother. My sister will have a 50 pct ownership in the home, and will be on the deed/title, but for various reasons will not be on the loan/mortgage. Our lender has recommended that my sister "gift" me funds for her portion of the downpayment. In this case my sister is planning to gift me 50 pct of the purchase price, which will all go towards downpayment at closing. I will then personally make payments against the remaining mortgage.
I am trying to understand the tax implications of this, given that my sister will be on the deed/title. Is this a gift for tax purposes, subject to reporting, gift tax, and gift lifetime exemption limits? Or is it a loan, because I would be "paying back" the funds my sister provided by giving her a 50% stake in the home. Additionally, are there any other legal/tax implications I'm not thinking of.
Thanks for your help!
