Note that I am not an attorney and this is not legal advice, but I believe, depending on the amount of the gift, it would be subject to the gift tax if above $13,000. As far as the effect on the mortgage, once it's paid off you would lose the deductions for mortgage interest but a paid off mortgage is a good thing these days, so I don't see a downside. Make sure to consult a CPA. Gregorio Denny --WeFixRates.Com --

The advice that GVDenny has given is correct. But always consult a CPA to be 100% certain. Hope this helps.

She should contact an attorney and / or CPA to discuss the laws pertaining to this matter.