Tax Implications: Gift of Equity
Hello, I will be buying my mother's home in 2024 and as part of the sale she will be providing a gift of equity of $80,000. I understand there is an Annual Gift exemption of ~$15k (per child & spouse), and also a lifetime exemption of ~$12 million. Given the gift of equity exceeds the lifetime exemption, will my mother be required to pay any taxes on the excess gift over the annual exemption? It is my understanding, that she files a form 709 with the IRS when doing her taxes. The excess amount over her annual limit is subtracted from her lifetime exemption, and she pays no taxes. If she were to exceed her lifetime exemption, then there would be a tax applied. Is this correct? Thank you for your help, Evan
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