Gift to child question

[sdarave]

Client wants to gift his daughter 210K as a deposit on a home. He and his spouse will be eligible for the gift tax exclusion, but what about the daughter? Form 709? Other ideas?
Thanks--I'm glad he's asking the question in advance!

[Lion]

The daughter has no tax issues with receiving a gift within the US. Her mortgage lender might want documentation of the source of her funds, that it's a gift and not a loan.

Your client will file a gift tax return. If he and his spouse want to "gift split" or if each of them will be separately gifting the daughter, then you'll file two Forms 709 (there is no joint gift tax return). Unless they've already given their lifetime limits, there will be no tax owed with the returns. And, he/they should include ALL gifts to their daughter during the year for birthday, holidays, any gifts plus the cash home deposit.

Read Form 709 instructions.

[TAXNJ]

?…. And, he/they should include ALL gifts to their daughter during the year for birthday, holidays, any gifts plus the cash….

Does that mean “non reportable gifts” (under the annual threshold) to be “included” or those gifts do not need to be included on Form 709?

[Lion]

If he's giving $210K to his daughter, he has NO "non reportable gifts" (he's OVER the annual threshold) to his daughter. He includes the total amount of ALL gifts to his daughter during the year on Form 709. Read the instructions.

[TAXNJ]

If he's giving $210K to his daughter, he has NO "non reportable gifts" (he's OVER the annual threshold) to his daughter. He includes the total amount of ALL gifts to his daughter during the year on Form 709. Read the instructions.

Missed reading when you stated “during the year” ALL gifts. At first thought you meant ALL lifetime gifts.

Yes, many clients keep receipts of gifts under $15,000 especially the $5 to $25 gifts!