Now we won't find any real estate in Southern California for $50,000, but the example below can be helpful. There are many ways parents or others can help a younger person make their first purchase. Call Tim James if you would like to schedule time for a consultation. Or consult your tax accountant or attorney for the best approach for your specific situation...
From Daily Real Estate News, June 4, 2010
Helping someone close to you buy a low-cost property – $50,000 or less – is a fairly straight-forward transaction, although it may require specific legal advice, says Charles Carter, an attorney and a consultant at Haint Blue Realty in Mount Pleasant, S.C.
Carter suggests that buying a property outright, using the gift exclusion ($13,000 for singles; $26,000 for married couples) to pay for a down payment and closing costs and then giving the recipient a 30-year mortgage on the remaining amount at 5 percent interest is a good way to go.
There won’t be any gift taxes. And the mortgage holder may later cancel the mortgage and gift what remains on the loan as another annual gift-tax exclusion.
Source: McClatchy-Tribune News Service, Charles Carter (06/03/2010)
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