Can I gift my grandaughter money who in turn gifts it back to her parents to buy a home?
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Can I gift my grandaughter money who in turn gifts it back to her parents to buy a home?
I am giving my family 45,000 to help them with their down payment on a new home.
15,000 each to my daughter, her husband and her daughter. The maximum tax free
gift is 15,000 this year. If I just gave the 45,000 to my daughter I would
have to fill out a tax form which I am trying to avoid. By my gran daughter
immediately gifting her gift I would avoid the tax report if that is legal.
Asked on April 30, 2018 under Real Estate Law, New Jersey
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
This is a risky thing to do and is not recommended.
Technically, a person may "regift" money gifted to them, and the gift limits vis-a-vis each person are calculated separately. However, as you can imagine, the IRS looks askance at people trying to circumvent their rules by coordinating with others. If this gets onto the IRS's radar screen and they conclude that you used your granddaughter as a "straw person" to circumvent the gift limits, you could face penalties.
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