Hi all,
I am 6 months into practice and am looking into buying a vacant lot for a future home. My wife and I just paid off our loans (210K), make combined 530K / year and are saving 20% gross for retirement, 10K to 529.. That being said, a piece of land became available in a very desirable area that will not be around for long. As we have put "most" (i.e. all) of our extra cash towards loans, we have no way to buy the land. Our family has graciously agreed to forward the 240K for the land (which we will pay back in 2 years). No plans to build a home on it for a few years, at least until we can pay off land and use that a nice down payment.
My question is if this will pose a gift tax problem. Ive read that 14K can be given a year, or else it goes toward the lifetime limit (of 5.5 mil). Other than going toward the limit, the "gifter" should not incur any extra penalty or taxes, correct?
I am 6 months into practice and am looking into buying a vacant lot for a future home. My wife and I just paid off our loans (210K), make combined 530K / year and are saving 20% gross for retirement, 10K to 529.. That being said, a piece of land became available in a very desirable area that will not be around for long. As we have put "most" (i.e. all) of our extra cash towards loans, we have no way to buy the land. Our family has graciously agreed to forward the 240K for the land (which we will pay back in 2 years). No plans to build a home on it for a few years, at least until we can pay off land and use that a nice down payment.
My question is if this will pose a gift tax problem. Ive read that 14K can be given a year, or else it goes toward the lifetime limit (of 5.5 mil). Other than going toward the limit, the "gifter" should not incur any extra penalty or taxes, correct?
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