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We need to pay off the mortgage on our current home before we can move. (We already have our second house and 2 mortgage payments are becoming difficult). Mom will be coming with us when we move and offered to use the money from the recent sale of her home to help pay it off. Once the home sells, we plan on giving the money back to her that she contributed. Does anyone know of any legal reason why we can't do this?

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Not quite the same thing, but my mom lent money to my kids to help with college tuition. She was pretty savvy about tax ramifications...she paid the colleges directly, rather than give the money to the kids to pay, and she had them both sign promissory notes laying out the amounts and the terms of the loans.
She had enough money plus a long term care policy, so a Medicaid look back was not likely to ever be an issue.
I paid back the loans from my share if the estate, so my sisters weren't shorted anything.
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Reply to notgoodenough
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I know about the Medicaid thing. We went through that with my MIL. We will definitely give back every cent. I'm sure we can get a contract notarized.
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Reply to dgcctoth
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Yes she can, but it would be considered a gift (check with tax attorney). She would need to file the proper gift tax form with her taxes at year end to account for this, which decrements to overall of 12M she is allowed to legally gift to you over a lifetime.
This form is only for record keeping of her gifts. If it is NOT filed, then the gift tax will be your responsibility to pay. Please google some basic questions on this and also see the irs.gov website for detailed info.
Disclaimer: If she is paying $30K or less, then it will not need documenting, as she is allowed to gift $15K to you and $15K to your husband without documenting.

Now if this is truly some sort of bridge loan, there must also be legal documentation to account for her giving it and you repaying it. Check with attorney after you read irs info.
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Reply to ML4444
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dgcctoth Mar 2, 2021
She doesn't file taxes, she's 91 and hasn't filed in years. It will be more than $30K total but we should be able to sell the house this year and give the entire amount back to her that she contributes.
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It could cause problems if Mom needs LTC within the next 5 years with Medicaid footing the bill. Her money needs to be used for her care before applying for Medicaid.

But you plan on paying it back. If me, I would have a contract written up between you.
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Reply to JoAnn29
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