Posted on: 13th Mar, 2010 07:36 pm
my son and his wife are 28 years old and have been in their first home for 4 years. i would like to take a home equity loan on my home for $40000 for 10 years and lend it to him to pay off loans and accumulated credit. this would enable him to save about 12000 per year for 2 years and put him in a good position to sell his house,
pay off the loan and make a down payment on his new home. i am concerned how this would affect use tax wise. would he have to claim that money as income?
pay off the loan and make a down payment on his new home. i am concerned how this would affect use tax wise. would he have to claim that money as income?
If you take a loan on your property, then you would be responsible for paying it off. If you gift the money to your son, then you would be liable for paying the gift taxes if you cross the exemption limit. If the money is transferred to your son as a gift, then it won't be considered as his income.
a loan to your son would not be considered income to him. after all, he is obligated to pay it back if it's a loan. the interest you charge to him, if any, would be income for you, and you'd have to pay income taxes on that.
if you two are in agreement and you have the financial wherewithal to do all this, and he can pay it back without issue, then i think you've got a good plan.
if you two are in agreement and you have the financial wherewithal to do all this, and he can pay it back without issue, then i think you've got a good plan.
The popularity of home equity line of credit is on the rise. In a recent LendingTree survey, 68.3 percent of respondents who had borrowed using home equity loan chose a home equity line of credit over a one-time loan in the first quarter of 2004. This is an increase from 37.5 percent.
With a home equity line of credit, you will be approved for a specific amount of credit. This amount, also known as your credit limit, is the maximum amount you can borrow at any one time while you have the line of credit.
With a home equity line of credit, you will be approved for a specific amount of credit. This amount, also known as your credit limit, is the maximum amount you can borrow at any one time while you have the line of credit.
dream, please don't waste peoples' time with meaningless statistics, especially if you're going to go back 6 years to find them.