By 
Dear Quentin,
Last year, my husband and I approached my in-laws to see if they wanted to live with us. We had learned that my father-in-law had terminal cancer but could still live five to seven years in remission, and we felt that when the time came and my father-in-law passed, the adjustment would be easier on my mother-in-law, as she is quite dependent on him.
They agreed to this arrangement, and we each sold our homes for a profit; my in-laws already owned their home outright. We agreed that my in-laws would give us the 20% down payment we needed to buy the new home, and we would make the monthly mortgage payments. This 20% down payment is my husband’s inheritance.
“There is also the issue of goodwill. You and your husband were able to afford a larger home because of the 20% down payment given by your in-laws. ”
Some related news on the tax front: Your in-laws, and any other individuals with the means to do so, could each give away up to $12.93 million (after tax exemptions increase in 2023) to their family members through gifts made during their lifetime or through bequests without incurring any federal gift- or estate-tax penalty.
As a married couple, they could give away $25.84 million without incurring a tax hit. Next year, the annual gift-tax exclusion will also increase, to $17,000 from $16,000. These exemptions rose significantly with the Trump-era Tax Cuts and Jobs Act. Good news for the transfer of wealth among, well, wealthy family members.
As for your original question: Asking your in-laws to contribute 20% of the cost of air conditioning sounds mathematically logical, given that their living space accounts for 20% of the home’s square footage — but their 20% down payment should weigh against such a request.
Uncertainty leads to anxiety, and anxiety leads to resentment. Set clear expectations so they — and you and your husband — are not living under a cloud of insecurity about who paid what, or of doubt about who should pay what. Your in-laws are paying guests in your home, but they are guests nonetheless.
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