My parents bought my house with cash when I was going through a divorce, and now I owe them 1/3 of the money back. What is the best loan option for me to get so I can make one payment back to them? the house is in their name and I would like that transferred to me as well? should I now get a home loan and buy it for the lesser amount?

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    You need to go to the bank and get a mortgage to buy the house. – quid Jun 20 '17 at 19:16
  • house is paid for at 300,000 and I owe them only 100,000...do I buy it from them at 100,000? – user57783 Jun 20 '17 at 19:23
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    Be careful. You are implying that the amount paid by your parents did not equal the value of the house at the time. Whether some or all of the value of the house would be considered a gift for tax purposes will depend on specifics relevant to your jurisdiction (which you have not mentioned). In short, if your parents technically own the house outright, and it's worth $300k, then you paying them $100k is not fair compensation for the house. In some cases, that might mean you are receiving a gift worth $200k for taxable income purposes. – Grade 'Eh' Bacon Jun 20 '17 at 19:26
  • Which country are you in? – Ben Miller - Reinstate Monica Jun 20 '17 at 19:37
  • Why do you owe them 1/3 of it back? They paid you and received a house in return - so why do you owe them anything? – D Stanley Jun 20 '17 at 20:46

Assuming you're in the US, you can buy the house from your parents for $100k with a mortgage, and the excess value (less annual gift limit) will count against your unified federal gift and estate tax exemption. So at $300k value you'd take $172k against your total exemption ($200k value over price paid, less $14k per parent). No gift tax liability on your parents' end, unless the exemption has already been used up.

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    Note that your parents would almost certainly have to file a form 709 with their next tax return. – David Schwartz Jun 20 '17 at 20:37

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