Gift of equity

My parents offered to sell me their house. It is valued at 180k+ And they will sell it to me for 90K. I am married and have a daughter. How much gift can my parents give me without having to pay any taxes? The bank told me we should write the paper up as we are buying the house for 135K but only borrowing 90k and they are gifting 45k. Will they be taxed for this? They are retired and can not afford the extra tax. Any help would be great! Thanks!

Modfox,

Your parents could sell the house on the market, An Arms Length Sale, for $180K.
Your parents are gifting you $45K.
You are buying the house for $135K.
You are borrowing $90K.
Did you fail to mention a $45K down payment you are making?

Without your $45K down payment, these numbers just don't make much sense.

Each of your parents could gift to you a value of $12,000 during a calendar year ($24,000). They can also gift to your spouse the same ($24,000). There would be no need to report this type of gifting, and thus no taxes. That $12,000 annual gift includes amounts for Christmas and birthday gifts and gifts for all occassions.

They could gift the entire $45K just to you and probably have no gift tax to pay. However they would then need to file a gift tax report, form 709. Most likely they would not need to pay any gift tax, as we can all gift $1,000,000 in our life time before we are required to pay any gift tax.

That's a really nice idea :)!

Good info, thanks clyde.

Is this gift tax is same in all the states or it differs.

Federal gift tax is what is referred to above.

Here is a link that lists taxes by each state: http://www.retirementliving.com/RLtaxes.html

Have fun!

That is an awesome idea and thanks for the link.