If i purchase a house with my daughter do we have equal rights to the equity without tax consequences??

Clement
Since I put in the large down payment, can she then get the equity without taxation (for example refinancing the mortgage)??

Joie
Taking out equity is never taxable income to anybody. Only a sale of a non-residence is taxable to the sellers. But when you buy real estate in joint names and do not contribute equally to the purchase price you have made a gift. See Form 709 instructions to report gifts over 12, 000 per year per donee.

Arturo
Hi, If you and your daughter are both on title to the house and both have debt secured by the residence, which you are both liable for (a mortgage), then you'd both be eligible for the Section 121 exemption from capital gain ($250, 000 each). This "exclusion" amount of $250, 000 each, is if you both meet the criteria, meaning that you both live in the home at least 24 months (prior to reselling it) and that you both own the home (at least 2 years). :) To read the letter of the tax law, please visit www.irs.gov and search for Section 121 capital gain exclusion from the sale of your home. http://www.irs.gov/pub/irs-pdf/p523.pdfGood luck and I hope that I've been of some help. If you would like an informed opinion from a licensed tax professional in your area, go to www.naea.org, where you will be connected to an EA (enrolled agent) who specializes in tax and is licensed by the Federal Government to assist you with tax issues.

Kiyoko
If the house is put in both your names you will both be equal owners of the property. You would both have to be involved in any refinancing of the property. So if you're worried about her refinancing without you, she can't.If you have the house for longer than 2 years you won't have to worry about paying any Capital Gains taxes on the property. Meaning if the house equity goes up 20k you will get the full amount back. Else you'd have to pay a good amount of taxes on it.

Deetta
I have been a tax accountant for 27 years. I must tell you that, although typical, your question cannot be given a rational answer because there are far too many determinative bits of information simply not there. Refinancing a mortgage does not result in a tax liability because equity was withdrawn because you are also taking on an equal amount of debt. I will not comment on whether the interest on the refinanced amount will be deductible simply because there is not sufficient information to make that call.