Money From Parents To Buy First Time House

My parent is willing to give me money (between $150K - $200K) towards the downpayment of a house that I wish to buy.

Any gift tax implications? Any comments/recommendations?
And what is the best strategy?

I rent in southern California, but not yet decided where and how big to buy, but as much as possible looking for somewhere nearby.

Thanks!

Koreano,

You have very generous parents.

Each of your parents can give you a gift of $12,000 per year and not have to report this to the IRS. They can also gift the same amount to your spouse. This gives you $48,000 that has no impact on the life time exemption from gift tax for your parents.

Gifting beyond that $12,000 per year ( and that includes all gifts in a year including birthday, Christmas and just because gifts) it is your parents that must file form 709 and perhaps pay gift tax.

Each of us has a lifetime $1,000,000 exemption that we can give away without paying any gift tax. Form 709 reports gifts beyond the value of $12,000. The amount beyond the $12,000 begins to reduce that $1,000,000 exemption amount. the Giftor would need to pay the gift tax after using their exemption amount.

you or your parents need professional assistance. a minor screw up on this could mean several thousands of dollars.

what are the possible complications?

I thought gifts are tax free for the recipient?

Koreano,

Gifts are tax free for the one that receives the gift.
It is the giftor that may need to pay the tax.

im not familiar with taxes but i hope i can help you with this..
http://www.irs.gov/newsroom/article/0,,id=107815,00.html

gift are free of charge but you still need to pay the yearly dues for taxes and stuff. so. just ask for a car instead and let them pay the whole amount.