generous parents have offered to give me $10,000 towards the purchase of my new
home. Is there any special paperwork I need for this?
Lucky you! The
main paperwork you need is what’s called
a “gift letter.” If you use your parents’ gift money to buy your house (not
just furniture), your bank or mortgage lender will typically require written
documentation from the gift giver (in this case, your parents), stating that
the money is a gift, not a loan.
This gift letter should specify the amount of
the gift, your relationship to the gift giver, and the type of property (the
exact address, if you know it) for which the money will be used. Most
important, the gift letter should state that the money need not be repaid. Your
lender may have a form for this purpose, or you can use Nolo’s sample gift
In terms of paperwork for your parents, they
will not need to file a Form 709 gift
tax return because they are making a gift that is less than the amount one
person can give another person each year as a tax-free gift. (The 2015 exclusion figure
is $14,000, but this is indexed to go up for inflation.)
In fact, your mother
and father could give you a tax-free gift of $28,000 (plus $28,000 to your
spouse or partner, if you have one) this year (just in case they are feeling
even more generous).
For more information on gift taxes, see the Frequently Asked Questions on Gift Taxes page of the IRS website.
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