Would this be in anyway considered a gift taxable by IRS?

My husband's Dad recently came in large amount of money due to death of his uncle. He wants to pay off our home and hold the mortgage at 4% to help us out. This would save us lots of money. Basically we would be refinancing and paying off the exisitng mortgage company and pay his Dad for the 220,000 at 4% interest. WOuld the IRS consider this a gift and he be taxed in anyway?

Would this be in anyway considered a gift taxable by IRS?
It's not a gift... It's considered a loan. Make sure all of the paperwork is in order... Signed promissory notes, etc.
Reply:Unless you can prove the interest rate is competitive with what others are paying for such mortgages then you are on a slippery slope. A transaction between relatives is scrutanized by the IRS and the interest rate must be market rates to be considered a loan.
Reply:I'd run it by a tax lawyer or CPA, but my guess is that you'd have to do all the paperwork associated with a loan and that he would have to be listed as the lienholder.
Reply:Hmmm, if he paid it off, he could deduct it unless it was given to you to deduct. It depends on the amount.

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