<prompt> Human: Story time:Im buying my dads house. Expected appraisal value is around 400k. He has agreed to sell it to me for 360k. Can I get a loan for 400k between 4-5 interest rate, have the contract reflect a 400k price, and him use the extra 40k to pay down my and my wifes credit cards rates are between 9 and 13? Are there any downsides that I am not seeing here? Will he have to pay taxes similar to a gift tax when the amount is over 10k?Thanks!  <response>: He wont pay gift tax on that amount unless he has exceeded his 5.43M life time gift limit... see here He will, however, need to file a form with the IRS reporting the gift since it is in excess of the 14k limit, but he wont owe any gift tax on it. 