Gift Of Equity Contract Example With Loan In Salt Lake
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FAQ
If your parents sell you their home for $100,000 and it's worth $300,000, their gift of equity equals $200,000, the difference between what they're selling the home for and how much it is actually worth. A gift of equity is valuable.
Gifts of equity, like other gifts, aren't taxable to the recipient. The seller might have to file a gift return. They're allowed to give $15,000 per person each year without having to file a gift return. So, if the gift of equity they gave you is less than $30,000, they don't have to file the return.
Gift of Equity The gift represents a portion of the seller's equity in the property, and is transferred to the buyer as a credit in the transaction.
Gifted equity requirements The letter should be signed by the buyer and the seller. Funds must also be properly documented through financial records. So, be prepared to provide copies of your recent bank statements, your donor's recent bank statements, and copies of cashier's checks.
Gift tax: A gift of equity could trigger the gift tax, so the seller should follow Internal Revenue Service gift guidelines. For 2024, a married couple can give up to $36,000, and a single person up to $18,000 to an individual per year without being subject to the gift tax.