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

Keogh plan

Retirement plan set up by a self-employed person, providing tax-deductible contributions, tax-free income accumulations until withdrawal, and favorable averaging for qualifying lump-sum distributions.

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