The IRS issued Revenue Ruling 2006-27, on May 22, 2006.  This ruling implies that for TAX PURPOSES ONLY, similarly structured transactions are not to be treated as a gift for income tax purposes.  Similar down payment funds are to be treated as a rebate against the purchase price of the property, lowering the purchaser’s basis in the property.  Please seek competent legal and tax advice before entering into this agreement.  This information is not to be construed as tax advice.  Each individual’s situation may be different and advice should be provided by a competent tax advisor.