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Updated over 4 years ago on . Most recent reply presented by

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Jay Gibson
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Gift of Equity and tax implications

Jay Gibson
Posted

I am purchasing a house from my parents under market value. FMV is $450k. My parents need to net $310k from house once everything is done. The lender is suggesting a sales price of 450k and a loan amount of 326k with my parents paying closing cost. Once the dust settles there should be 310k remaining and a gift of equity amount of 140k. (I am in Texas if it matters).

What would the tax implications be?

How would this effect either party for cost basis?

Thank you,

Jay

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