This article discusses the challenges of saving for a down payment on a home and the common practice of receiving cash gifts from family members. It emphasizes that only immediate relatives can provide such gifts, and detailed documentation is necessary for lenders. The article also outlines the IRS rules regarding tax-free gifts, noting that individuals can give up to $19,000 tax-free; married couples can double that limit. Special conditions apply if the down payment is less than 20% of the home purchase.
If you're buying a home, you can only use a cash gift from an immediate relative to help get a mortgage to buy a home.
Any one person can give a gift of $19,000 or less to another individual and not have to pay taxes on it or to report it to the IRS.
Keep in mind you will have to provide detailed documentation in the form of a gift letter to the lender that states the name of the donor.
If you are putting a down payment of 20% or more, it can all be gifted money. But if your down payment is less than 20%, some of that needs to come from your own pocket.
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