Fill in Your Gift Letter Form

When individuals receive financial gifts, especially for significant purchases like a home, various forms and documents may accompany the Gift Letter form. These documents help clarify the source and nature of the funds, ensuring compliance with lender requirements and regulations. Below is a list of commonly used forms that may be required alongside the Gift Letter.

• Bank Statements: These documents provide proof of the donor's ability to give the gift. They show the funds available in the donor's account and help verify that the money is legitimate and not borrowed.
• Gift Tax Return (Form 709): If the gift exceeds a certain amount, the donor may need to file this form with the IRS. It reports the gift and ensures that the donor is aware of any potential tax implications.
• Loan Application: If the recipient is applying for a mortgage, this document outlines their financial situation, including income, debts, and assets. It helps lenders assess the recipient's ability to repay the loan.
• Proof of Relationship: This may include documents such as birth certificates or marriage licenses. They confirm the relationship between the donor and the recipient, which can be important for validating the gift.
• Affidavit of Gift: This sworn statement may be required to confirm that the funds are a gift and not a loan. It adds an extra layer of assurance for lenders regarding the nature of the transaction.
• Closing Disclosure: This document outlines the final terms and costs of the mortgage. It provides transparency and helps the recipient understand how the gift funds will be applied in the transaction.
• Identity Verification Documents: These may include copies of driver's licenses or passports for both the donor and recipient. They help confirm the identities of the parties involved in the gift transaction.

Each of these documents plays a crucial role in the process of gifting funds for significant purchases. Together, they provide a comprehensive view of the transaction, ensuring that all parties are protected and that the financial gift is properly documented and compliant with any applicable regulations.

When filling out a Gift Letter form, it's essential to follow certain guidelines to ensure that the process goes smoothly. Here are some important dos and don’ts to keep in mind:

• Do clearly state the relationship between the giver and the recipient.
• Do specify the amount of the gift being given.
• Do include the date when the gift was made.
• Do sign and date the letter to validate it.

• Don't leave out important details; incomplete information can cause issues.
• Don't use vague language; be precise about the terms of the gift.
• Don't forget to keep a copy of the letter for your records.
• Don't provide false information; honesty is crucial in these documents.