Loan to Parents

Fatherjacob

Since selling my house 2 months ago and not finding another place. Im left with a large sum of money 250000 .
Now im wondering if it is possible to give some money to my folks say 50000 to help towards thier own mortgage .
Would this be regarded as a gift,for tax purposes ?
Its a confusing topic so anyone that help that can point me into the right direction would be greatly appreciated.

vic_msn

Would it be possible for you to pay directly into the loan account without any tax implications to you or your parents?

[Deleted User]

You can gift them as much as you want without tax implications.  It's only an issue if you plan on dying within the next seven years.

Fatherjacob

Thats really what im asking for ,would giving them that money raise a red flag where i have to supply legal proof of the loan? Or could it just be a verbal agreement.

[Deleted User]

If it's a loan instead of a gift, it's between you and your parents as to the repayment agreement.

MallyGirl

you need to decide very clearly if this is a gift or a loan.
If a gift then just transfer it to them and maybe write a letter to that effect. Since you are unlikely to pre-decease your parents then that is all there is to it.
If it is a loan then you need to draw up a payment agreement. If there are other siblings you would want your loan repaid before the estate was divided up if they were to die before they had paid you back.

Fatherjacob

Gotcha..will look to find a template ,or draft something myself..thanks for the help.

[Deleted User]

Will you not be needing the money back in the (hopefully) not too distant future when you are looking to buy another property again?