Anyone know for sure? I loaned my mom a significant amount of money. She's paying me back. I actually paid off her cc directly. She's paying me back with cash she received from selling her home. It's all legit. Not a gift, so not reporting it. But it's a big amount she's paying us back and I just don't want to be flagged for audit. Any thoughts?
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I think checks over 10k get audited.
Not sure what the chance of actually getting audited is though.. pretty slim I'd say? -
Yeah anything over 10k is likely to catch an eye.
ETA the gift tax exclusion limit is currently 14k, in theory your mom could gift both you and your husband 14k for a total of 28k so even if the IRS tried to deem the check a gift it would have to be over 28k (assuming it's made out to both of you)
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@MamaMoose: it's more than that. Like closer to 50k. But since it's a repayment, it's not a gift.
@chopsuey: yeah, I know everything over 10 gets reported, but I don't want to raise any flags. I'm considering maybe multiple checks of 5-9k? Lol
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Even though it's legit. I would probably do what @MamaMoose: sugguested and do 5-9 k checks over the course of 2 years (aka 14k to both you and your DH (28k total each year)).
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@tequiero21: If you want to be safe, you can ask your mom to write a letter stating that the check is in repayment of a loan, and have it notarized. That way you have it in case of audit (but i know that's what you are trying to avoid). I'm not a tax professional but this is what my mom did when she gave me a large sum of money which I repaid by taking out a loan.
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@Raindrop: we are looking to buy a house, so we would like that cash now.... Rather over 2 years or even a few months...
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@tequiero21: if your mom gives you the money back (gift or repayment of a loan) and you buy a home soon after she'll will probably have to certify to your mortgage company that the money is a gift or otherwise not subject to repayment. Our mortgage lender wanted background on all deposits over $1k, outside of our employers, made within a few months before we bought our house. So, I'd probably talk to a tax professional or an attorney about how best to document.
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Exactly what @yoursilverlining said.
I've never been in your shoes, but wouldn't have thought about audit risk. It's a legitimate repayment of a debt.
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@yoursilverlining: thx for the heads up. I'll have to look into this. We are looking to buy within a few months, but we know we want it in our account for at least a month.
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