USA Gift of Equity Question & Tax Implications for the Gift Giver

[David Zuckerman]

I'm a mortgage broker and assisting Clients purchase their parents home. In structuring the loan I want to have the parents "gift" their daughter and son-in-law $50k in equity. Without any expectation of legal or tax advice, from a theoretical perspective what will be the tax impact to the parents:

• Answer A - $0: Each parent can gift $14k to their daughter and son-in-law, so there won't be any tax implications unless the total of the gift exceeds $56k
• Answer B - tax on gift amount in excess of $28k. Each parent can gift their daughter $14k for a total of $28k

Appreciate the help.