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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
Passive activity loss rules
Rules that limit the deduction of losses from passive activities to income from other passive activities. Passive activities include investment rental operations or businesses in which you do not materially participate.
