My dad is moving to Florida. He loves the house he has in New York. He wants it to stay in the family but I can't quite afford the mortgage yet. I have a wealthy cousin who said he'd hold the NY house for us for 2 years by purchasing my dad's house in Florida and have my dad just gift me the NY house. (Following?)
- House is worth
$430kand my dad purchased it 30+ years ago for
- My wife and I plan to live in the house for the next 10+ years
I have 2 years to be able to afford the mortgage and give my cousin/dad the money back. Here is my understanding:
- He files a 709 gift form (I understand
$14k/yr $5.4M max)
- My dad then puts the title of the house in my name
- In two years, I take a mortgage out on the house for the full amount
- I give my cousin/dad
$430kfrom the mortgage
- Live happily ever after
- Where are the tax warnings in all of this?
- Is it true that I don't pay capital gains if I lived in the house for 2+ years and sell it for more than the
- Will a bank be willing to take out a mortgage on a house that I technically own for the full amount?
- What do I need a lawyer to do?
Edits to answer questions:
Why doesn't he just buy the NY house and rent it to you?
Insurance would go up for me if I couldn't get the multi-line discount. The taxes would be in HIS name and property taxes would go up. He also doesn't want to be bothered by collecting rent.
Are you and your dad married?
Both my dad and I are married... to wives, not each other.
Can your dad sell it to you for what you can afford, or does he need the full $430k to buy the FL house (hence the cousin's involvement)?
He needs the full amount for the home in Florda.