Is there a non-income tax way of my father paying off my house?
My father will soon be moving in with me as he is retiring at the age of 77. We are wanting to pay off my mortgage (0,000). But we want to do it all in my name because we don't want it to appear as an asset to him in case of any major issues arise, such as medical. Plus, if he ever needs in-home care, I would be able to do small contract work at the house instead of needing a full time job.
The other issue with putting it in his name is the property will be reassessed because I would have to sell it to him at fair-market-value and that is something we want to avoid because the housing market has exploded in that area again and the house is worth far more than what I initially got the mortgage for.
In the event I go before him, I am going to get a will just to make sure that the house is his.
With all of that said, the only thing I can find is the ,000/year a person can give tax free. I am unable to find anything else that would allow more money. Is there anything else we can do? Even if it isn't the full amount, it should help with other possibilities.
If we did do the full 0,000 with taxes, what would the percentage of that be if say my taxable income normally was 0,000 (W2)?
Jokingly I was thinking of having my dad gift money to my aunts and uncles and then they gift it back to me, but I am sure that's just asking for trouble ;)
Any info would be most helpful.
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A few things come to mind:
Gifts above ,000 (raised from ,000 in 2018) are not necessarily taxable. Gifted amounts over the ,000 annual exclusion are applied toward the lifetime maximum of .4 Million. Only after that maximum has been reached do gifts become taxable. Also, the tax is applied to the giver, not the receiver.
Be very careful about hiding/gifting assets because it may impact Medicaid eligibility. Any gifts or transfers made within 5 years of applying for Medicaid may make the giver ineligible for a period of time. You may want to speak with an estate attorney.
There are other ways to shelter assets from liability, such as setting up a trust.
Bottom line is: I would speak to an estate planning attorney to make sure everything is set up properly both from a legal and tax perspective.
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