USA Gifting

[Nar1957]

My client wants to purchase a condo for his mother to live in. She will pay enough to cover the mortgage payment, taxes and insurance. Does he have to show this as rental income or can she gift him the money and she would live there free allowing him to deduct motgage interest and taxes on a second home?

 

[maarkr]

max gift for 2016 is $14000. If that covers it, you could go that route. I'd have to do research to get you the best answer.

 

[DTA93433]

I too would suggest gifting the $$$ to the son-in-law. I'm presuming the son-in-law has his own "tax home". Most likely - because of the fact that the mother-in-law will be living in the condo - the son would not be able to deduct the additional mortgage interest and/or taxes though off his Sch A (unless he wishes to change his "tax home").