Reply to How many people in your social group had family support in buying a house?

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[quote=Anonymous][quote=Anonymous]There are rules as to how much money parents can “gift” their kids per year. I don’t think they can just plop down $100K for a down payment on their child’s house.  However, they can pay a private school directly and then also gift the appropriate amount to their kids. A lot of wealthy parents do this instead of saving it for inheritance.  [/quote]

You can gift your kids more than the maximum gift amount by calling it a loan and then writing it off by the maximum gift amount each year. It's all by the book as long as you charge the applicable federal rate (AFR) which is like 1.3% or something very low.

So in your $100K example: if the parents are married and the kid is married you could give them $100K up front - $64K is a gift ($16K to each from each) - and $36K is a loan. Charge 1.3% (or whatever it is) on the $36K - so $36,468 - and then write off that full amount the next year as part of your $16k/yr annual gift exclusion.

In this way you could $500K to someone and write it off by $64K a year as long as both couples stay married. (Not an attorney but that's my understanding).[/quote]

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