I am from India and currently residing in US. My parents would be sending around $30,000 to help me with down payment. Has anyone does this before? Would like to know the tax implications and how it works out.
Gift tax exemption is $15,000 for 2018 per person so each parent sending you that will get you $30,000 tax free regardless of what you use the money for. I have no idea if it coming from abroad is an issue so it’s worth asking about that.
This is completely wrong. Gift exemption is $15k which is correct but you don’t get taxed above it unless your lifetime gift total hits $5M. Moreover the $15k limit is just a declaration limit which means you dont’ have to declare anything if you received less than $15k. And if two parents gift you total $30k, you will have to declare. And again, just declare while taking the loan and while filing tax. No taxes will be levied. I have done this multiple times.
“This is completely wrong” - goes on to say nothing that negates what was said, but adds more detail.
Dude just take the money and make a down payment. Done!
Confirm online or talk to a CPA but I think limits for gifts from parents are much higher
Transfer the money using crypto
Dont do this if you need a mortgage it wont be accepted
Do it pussy
There is no limit on gift funds (on the US front) coming from a parent towards downpayment. There is a 100K limit that the Indian govt enforces for outbound remittances. I went through the same thing, had them transfer around 40K. Best of luck!
Anything beyond 30k you pay tax on that gift in USA. Also, I got 15k from India and did not pay tax on it
I did the same and there is no restriction on getting gifts from abroad as long as money is coming from legit accounts.
One thing, you may want to have parents write a letter to you stating the amount and that it is a gift with no expectation of repayment. My lender required this as I had a 10k gift from parents. They get sort of itchy about anyone not on the mortgage having contributed a significant amount as that's an additional party that could argue they have ownership. This may depend on lender but it's an easy enough thing to do.
^ this. Same experience. Mortgage lender will trace every lump some of money and will ask you where those lump sums come from. If you say family, they will require a letter.
That can be bypassed by first transferring to your own account abroad if u have one and then transferring it. You still have to do the relevant IRS disclosures if any of course
Bank will ask for the trace of good fund
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Literally call any bank and ask their mortgage brokers.