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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
Tax deferral
Shifting income to a later year, such as where you defer taxable interest to the following year by purchasing a T-bill or savings certificate maturing after the end of the current year. Investments in qualified retirement plans provide tax deferral.
