What is the best way to help my parents pay to renovate a place, while minimizing the taxes?
- Cost of Renovation: ~$70000
- Yearly combined income: ~$40000
- House value: ~$350000 (Paid off)
- Living in CA
- Yearly income: ~$400000
- Living in WA
- Most the money is in mutual funds. (Cost basis is around 30% of the total)
I was wondering what the best way would be. Any suggestions that I should look more into? I saw that under the gift tax, the donee may agree to pay the tax; how would that work with ordinary/capital gains income. Is it better for them to take out a loan and for me to gift them money every year up to the annual exclusion?