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My daughter is buying a new home. She needs 90,000 for a 20% downpayment.
Which would be more costly?
Gifting her $12,000 from both her father and I and then taking the remaining $66,000 from her 401K?
OR
gifting her the entire $ 90,000 and having to pay gift tax on the $66,000? The gift tax expense would one day come out of her inheritance.
I called the IRS and they wouldn't give me a percentage of what the gift tax would be. They referred me to their website and I down loaded a ream of info plus the gift tax filing form. I told her to call on the 401K and to ask what the penalties would be to withdraw as I understand they are all different in the way it works.
Thank you in advance for any suggestions.
arlene
NOTE:
Edited to say problem solved - you do NOT touch your 401K and we are able to give her a loan instead of gifting.
This message was edited Apr 26, 2007 4:42 AM
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