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Submitted By: Charles
Answered: June 8, 2015 8:10 am
Answered: June 8, 2015 8:10 am
What tax liability results if I pay off my son’s mortgage?
You have no income tax liability, but depending upon the size of the remaining balance you may face federal gift tax issues. Your son has no tax liability; your generosity in paying off his mortgage is a gift to him.
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Tax Glossary
Estimated tax
Advance payment of current tax liability based either on wage withholdings or installment payments of your estimated tax liability. To avoid penalties, you generally must pay to the IRS either 90% of your final tax liability, or either 100% or 110% of the prior year’s tax liability, depending on your adjusted gross income.
