My aging parents can no longer take care of their home and we are buying a larger house to accommodate them moving in with us. We could financially handle the whole cost but they have agreed to pay 25% of the purchase price. The 25% equals $280K. We will be providing 40% and financing the remaining 35%. This is too large for a gift deduction. It is a payment for the additional cost associated with them moving into our house so can we just write out an agreement that this $280K is to cover the additional expense that is incurred by their requirements? They will not be on the deed.
You are correct about the gift being too large and therefore taxable. Talk to your CPA before you do this. Sounds like a bad idea unless they are 25% on the deed. Ask the lawyer to make it a TOD inheritance. Just my opinion.
One draw back I hope never happens with your family, I had notice when my significant other had put a hefty down payment on his daughter's and son-in-law's first home is now he thinks he has a say on whatever they want to do with their house. Ouch, a lot of unnecessary fights and bickering.