More families may be feeling a little extra generous this holiday season and are offering loved ones help with a down payment on a home.
Coming up with the down payment has become a major obstacle to home ownership, according to a survey by Trulia from September. The survey found that 51 percent of 758 renters surveyed said coming up with the money for a down payment was what was preventing them from buyer and 36 percent said qualifying for a mortgage was holding them back.
But with the holiday season approaching, some lucky family members may find a down payment gift under the Christmas tree.
However, if giving a down payment gift, gift givers must remember that “under federal tax law, each individual is permitted to give away money or valuables worth up to $13,000 to a single recipient in a calendar year,” according to an article at The New York Times. “A married couple could jointly bestow up to $26,000 a year per recipient.” Anything above the maximum annual exemption could be considered a taxable gift and must be reported to the IRS.
Source: “Help With a Down Payment,” The New York Times (Dec. 1, 2011)
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