With a little help from the parents - San Jose Mercury News

Fernandez moved into the Pointe Pacific condominium about four months ago, after his parents helped him come up with the down payment. Without the financial help from his parents, Fernandez could not have bought his condo. I had set aside some money myself but they supplemented it greatly," said the 27-year-old, who works in engineering after graduating last year from San Francisco State with a degree in mechanical engineering. Hard numbers are difficult to come by, but from April to June 2011, 21. Realtors say most of the help is probably in the form of a gift. Parents who have been through previous Real Estate cycles see this as an opportunity. They also need to be sure that giving the money away won't hurt their own retirement plans. Anything above the annual cap is subtracted from the lifetime $5 million limit for making tax-free gifts. If taxpayers think they are going to go over the annual cap, they should first consult a financial planner or certified public accountant to discuss the tax implications, said Rouse. That can be done by writing a letter to the lender stating that the money is a gift, said Kieffer, the Danville Realtor. Otherwise, the lender will look at the down payment as a loan that has to repaid, which could make it harder for the child to get financing. Even though home prices are at a low point, "the down payment can be pretty daunting in the Bay Area," especially if the buyer is seeking a conventional loan that typically requires at least a 20 percent down payment, Kieffer said. An FHA down payment lessens the likelihood of running into gift-tax issues, he said. The excess amount is counted toward what can be given away tax-free during your lifetime. For estates of taxpayers who die in 2011, the lifetime exclusion is $5 million. The value of an estate plus prior taxable gifts above that amount is subject to being taxed up to 35 percent. Realtors