How Must I Document a Gift to My Daughter?

 In Estate and Gift Taxes

Question:

I’m planning to give my daughter the money she needs for the downpayment on her new house. What I would like to know is the formality of giving the gift of $100,000. Do I just give my daughter the check or do I need to have some kind of documents created by a lawyer in addition to the check?

Response:

All you need to do is write the check. Technically, you’re also supposed to file a gift tax return with the IRS when you file your income tax return for the year. This is because the gift you’re contemplating exceeds the $15,000 annual gift tax exclusion. However, no one will come after you if you don’t do so unless you’re in the rare position of having an estate exceeding $11.2 million, the threshold (in 2018) for estate and gift taxation.

Also, your daughter will not have to report the gift on her own income tax return because gifts are not considered to be income.

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