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.

Tax Glossary

Profit-sharing plan

A defined contribution plan under which the amount contributed to the employees’ accounts is based on a percentage of the employer’s profits.

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