Do you have to pay taxes on an $80,000 gift of equity

[morgan_ca88]

My dad and stepmom are giving my husband and I a gift of equity of $80,000 to purchase their house. Will they have to pay taxes on it?

[RichardG]

As a general rule, gifts are not subject to income tax.  However, they have made a gift that is subject to federal gift tax.  It's doubtful that they will actually pay gift tax, but the gift should be reported on Form 709.  TurboTax does not prepare this form.

Please follow this link for more information.  https://www.irs.gov/businesses/small-businesses-self-employed/estate-and-gift-taxes