Helping adult kid buying first house

[Anonymous]

kid is thinking about buying his first house. mid 30s, makes about 250k in a high COL area. we set up a brokerage account when he was young and it has about 280k (50k in roth and 230 in regular brokerage account). he is the primary owner of the account (but i still fund/manage). he tells me his max is about 750k. i am wondering how to help him out - 1) cash/gift out of our own accounts (how much)? or 2) cash his brokerage account and fund it using that money (i worry about his tax implications next year). i don't see any other way other than these two. thoughts?

[Anonymous]

Don’t help him.
Let him figure it out.He will feel better about his first house.

[Anonymous]

I don't get it. You e already more than helped him out?

[Anonymous]

You should just buy the house cash for him. Keep it for 2 years (or however long capital gains) and then sign it over to him for $1.

I mean that is how 99% of America gets their houses.

Good parents don’t let their child live in a 750K slum.

[Anonymous]

Talk to hi or just give him 50-100K of your money.

[Anonymous]

Does he know about the brokerage account already or no? If yes, Option 2 does not really seem like helping him beyond what you already have contributed. He may be planning on using that money already for his down payment, and you pulling it then giving it back is not really helpful. If you want to contribute beyond that, decide how much you’re comfortable with giving and let him know up front so he can shop and plan accordingly.
If he doesn’t know, better to tell him now and see what he wants to do. He may prefer to keep it in the account, even if you don’t want to contribute beyond what’s in it already.

[Anonymous]

Anonymous wrote:You should just buy the house cash for him. Keep it for 2 years (or however long capital gains) and then sign it over to him for $1.

I mean that is how 99% of America gets their houses.

Good parents don’t let their child live in a 750K slum.

LOL. I know right? Our kids certainly did not win "Parent Lottery."

[Anonymous]

Anonymous wrote:Does he know about the brokerage account already or no? If yes, Option 2 does not really seem like helping him beyond what you already have contributed. He may be planning on using that money already for his down payment, and you pulling it then giving it back is not really helpful. If you want to contribute beyond that, decide how much you’re comfortable with giving and let him know up front so he can shop and plan accordingly.
If he doesn’t know, better to tell him now and see what he wants to do. He may prefer to keep it in the account, even if you don’t want to contribute beyond what’s in it already.

He knows there is an account with his name on it but does not know how much is in it. Another minor complication is that if we were to give him cash support, we feel obligated to do the same to two remaining kids. All three have accounts with similar balance.

[Anonymous]

I would cash gift out of your own account to help with the down payment, if you have the money. But that's because my parents live to 100 and spend their time counting their money and don't want to disperse any before hand.

[Anonymous]

I don’t know the specifics of how this is done but I know a couple people who have been minority owners if their adult kids house (in that case hen the adult child sells the house parent gets 15% of the appreciation or whatever, not in a control what color they paint the powder room way.)

[Anonymous]

My parents gave us the max gift amount that didn’t trigger taxes for them. I think it was $15k each parent to each child, so they gave us a total of $60k, in four different checks.

One thing to note is that you ideally want the money in the account to “ripen” I think they called it. When we got ours and went to use it a week later they made my parents write letters that it was a gift not a loan. If it sits for a certain amount of time it’s just slightly easier.

[Anonymous]

Anonymous wrote:I would cash gift out of your own account to help with the down payment, if you have the money. But that's because my parents live to 100 and spend their time counting their money and don't want to disperse any before hand.

Yeah, that's my current thinking. Things may change but that might be the best way forward.

[Anonymous]

Anonymous wrote:I don’t know the specifics of how this is done but I know a couple people who have been minority owners if their adult kids house (in that case hen the adult child sells the house parent gets 15% of the appreciation or whatever, not in a control what color they paint the powder room way.)

I have no interest in claiming partial ownership (now or later) of his purchase. That sounds too business like for my liking even though it may make good business sense.

[Anonymous]

Buying in worse decision if you do the math than him renting the exact same home for the next 10 years. Why can't he rent it, build his own investment account into millions meanwhile and then buy it.
How much does he have after making $250k for years? Not a saver, is he?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I don’t know the specifics of how this is done but I know a couple people who have been minority owners if their adult kids house (in that case hen the adult child sells the house parent gets 15% of the appreciation or whatever, not in a control what color they paint the powder room way.)

I have no interest in claiming partial ownership (now or later) of his purchase. That sounds too business like for my liking even though it may make good business sense.

I think the point is that it not being a gift has tax benefits that are worth it. You can always gift the kid the profit later if you want