Submitted By: Charles
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

Gift tax

Gifts in excess of an $12,000-per-donee annual exclusion are subject to gift tax, but the tax may be offset by a gift tax credit.

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