Being extremely old-fashioned (and paranoid of banks and any investment vehicles), my parents have been squirreling away cash for the better part of 30+ years. Before you start harping on how foolish and naive they have been and how they've been losing value on that money, trust me, I have already been down that road with them before to no avail. Anyway, that's not what this post is about. The reason for this posting is that my wife and I are considering buying a house possibly in the next 10-12 months. As such, my parents have indicated that they would be interested in footing 20% of the purchase price (in additions to whatever sum we would put down - probably 10-15% on our part for a total of 30-35%) to avoid PMI, etc.


The central issue here is that the 20% from my parents would be least $100K (if not slightly more). The problem is that sum from them will be $100K+ in cash. Obviously, we're not going to be able to fund the home purchase with cash (it would need to be in the form of an electronic payment/check). Therefore, the question is, how do we put that $100K+ into our bank account without incurring suspicions of illegal activities or special notices from the IRS, fraud, etc. on both of us and our accounts (i.e. mine and my parents)? Should my parents just start putting in smaller cash deposits into my account now on a regular basis? If so, how much should these deposits be? Or should we just do an IRS Form 709 and will either of us be taxed on this gift (net worth of parents is less than $1M)?




Second unrelated part of this post is that my parents also own a house/flat in their native country. This was purchased well before they emigrated to America (and prior to becoming American citizens). If they were to sell this property now, would they need to report it to the IRS?