Homeownership is part of the American dream.
Which is why you may want to help your adult child make that important purchase.
But before you pick up your checkbook, consider the tax consequences of helping out.
You see, homeownership comes with some giant tax savings if you know how to play the game the right way.
We’ll show you how when you read my new article titled Tax Tips: How to Help Your Adult Child Buy a Home—the Tax-Friendly Way?
Here are five strategies you can use now:
Strategy #1: Make a gift of the down payment. A married couple can each give $14,000 to a child and the child’s spouse for a down payment. This gives you a maximum tax-free gift of $56,000. But be sure the gifts are paid for by separate checks. You’ll get the whole story when you read the full article.
Strategy #2: You be the lender. Not the bank. If you lend money to your child to purchase a home, he or she can deduct the mortgage interest that they pay you. You’ll be handling the loan the same way a bank would, but you’ll be offering more favorable terms. We’ll tell you how to proceed when you read the full article.
Strategy #3: Make your child the “equitable owner.” Will your child have trouble qualifying for a loan? If so, buy the home, take out the mortgage in your name, and your child can make the payments. They can deduct the mortgage interest if they can show that they are the equitable owner. We’ll show you how to make this work when you read the full article.
Strategy #4: Consider joint ownership. Here’s an easy one. Put you and your child on the mortgage. When you do, the child can deduct the full amount of the mortgage interest he or she pays, even though the child is only a partial owner of the home. If the child pays 100% of the mortgage, the child gets 100% of the deduction! All will be explained when you read the full article.
Strategy #5: Use the shared-equity program. If you’d prefer an even more business-like arrangement with your child, consider a shared-equity program. It’s a rent-to-own solution that may be perfect for your situation. We’ll explain how this useful arrangement works when you read the full article.