A gift affidavit lets a donor attest that an item is a gift and not something the donor will expect compensation from in the future.
What Is a Gift Affidavit?
A gift affidavit is a legal document showing a donor’s intent to give a donee a gift. In a gift affidavit form, the donor issues a sworn statement that they’re giving an item to a recipient without expecting any payment or other compensation.
When the item has significant value or requires a title or deed transfer, the gift affidavit clearly:
- States the donor’s gift-giving intentions.
- Documents that the process isn’t a loan or sale.
- Declares the recipient didn’t exchange another valuable object for the item.
Classifying an item as a gift may be relevant for registration, taxation, and other purposes. Federal or state officials may need to be aware of your provision of a gift so you can remain in legal compliance.
Do I need to have a gift affidavit notarized?
No. In most cases, you don’t have to seek notarization for a gift deed. Notarizing can be beneficial, as it verifies your identity and attests that you’re giving the gift without coercion.
When to Use a Gift Affidavit
A gift affidavit ensures a donor voluntarily bestows a valuable item on someone else. This document offers formal proof that the gift wasn’t a loan, so the person giving the item can’t demand its return, payments, or compensation. It declares the donor acted voluntarily when giving the item.
It’s often useful when a donor gives an item of significant value or money to another person, usually a family member. Here are some common use cases for gift affidavits below:
Personal Property
You can use a gift affidavit to document a transfer of personal property, including a collectible item, art, or jewelry. Recording the gift can help prevent misunderstandings regarding the nature of the present.
Motor Vehicle
You can use a motor vehicle or car gift affidavit when transferring a motor vehicle. If you describe the vehicle properly, you can gift another person a car, truck, motorcycle, or van. Having an affidavit of gift when giving high-value items like motor vehicles without the expectation of compensation can prevent confusion and promote transparency.
Cash
You also need to use a monetary gift affidavit as a testament that you’re giving cash as a gift. If someone challenges the cash gift, you can use this document to prove that the money wasn’t a loan or financial transaction.
What to Include in a Gift Affidavit
Here are the elements to include in a gift affidavit:
- Donor Details. The donor’s identification details, including their address, birth date, and social security number.
- Statement of Gift. A statement declaring that the donor is giving the item voluntarily.
- Recipient Information. The recipient’s identifying information.
- Gift Description. A description of the item, its worth, and when the donor intends to gift it.
- Notary Details. The person in charge of administering the donor’s affirmations and oaths.
Do I Have to Pay Taxes on a Gift?
The general IRS rule is that any gift is taxable. In most cases, the donor is responsible for paying any applicable gift tax, but the donor and donee may work out an agreement where the donee pays the tax [1] . It’s best to consult with a tax professional if you want the donee to pay the tax, as the situation can involve intricate details.
How to Avoid the Gift Tax
Even though the IRS considers all gifts taxable, many exceptions exist. Knowing these exceptions can help you ethically and legally avoid paying gift tax.
Follow these tips for avoiding the gift tax:
Method 1: Follow the Annual Gift-Giving Limit
The IRS imposes an annual gift-giving limit each year. For 2024, the annual limit is $18,000 per person. A single person can give up to $18,000 to one individual [2] . There isn’t a limit on the number of people they can give $18,000/year as long as they don’t exceed the lifetime monetary limit.
If you want to give more than $18,000 to one person, you may consider spreading the gift out over a couple of years. For example, imagine you want to give a nephew $30,000 as a graduation gift. You can give him $15,000 in 2024 and $15,000 in 2025, meaning you won’t exceed either year’s limit.
Historically, the IRS’s annual gift-giving limit has remained the same between years or increased.
Method 2: Take Advantage of the Lifetime Limit
Take advantage of the IRS’s lifetime limit of $13.61 million per individual [3] . A donor can give away up to $13.61 million in their lifetime without paying gift taxes.
Suppose you give away $20,000 to a family member in 2024. This amount exceeds the annual limit for giving to a single person, but you can still avoid gift tax by subtracting the remaining amount ($20,000 minus the $18,000 annual limit is $2,000) from your lifetime limit. You must fill out Form 709 to properly report your gift-giving activities and ensure the $20,000 isn’t subject to tax.
Method 3: Leverage Marriage in Gift-Giving
Even though two individuals can share property within a marriage, the IRS grants them each the same annual gift-giving limit of $18,000 per year for 2024. With this in mind, a married couple can give a gift to one individual up to $36,000 in value, and they can do this for as many people as they like. They only have to remain within their individual lifetime limits.
Method 4: Give a Gift for Medical Expenses
If you know someone suffering from a health condition that incurs hefty medical expenses, consider giving them a gift to cover them. All gifts for medical expenses are not subject to gift tax.
Please note that you must give the monetary gift directly to the recipient’s insurance provider or health care institution.
You may have to pay the gift tax if you give the gift directly to the recipient (even if the recipient intends to use it to cover their medical expenses).
Method 5: Give a Gift for Educational Expenses
You can give a gift to someone to cover their educational expenses and not be subject to the gift tax. However, gifts for educational expenses are similar to gifts for medical expenses. You must give the cash gift directly to the recipient’s educational institution to be exempt from the gift tax.
How to Write a Gift Affidavit
Step 1 – Provide Your Basic Details
Include your personal information, such as your:
- Name
- Date of Birth
- Address
- Phone number
- Social Security number (SSN)
This information helps the necessary parties identify you. Also, include the state governing the document in case a dispute arises.
Step 2 – Write the Donee’s Details
Input the donee’s name and address, making it clear to whom you’re gifting the item.
Step 3 – Describe the Gift
Describe the gift details. For example, if you’re gifting a car, you should provide the vehicle’s:
- Make
- Model
- Vehicle identification number (VIN)
- Value
- Title number
- Details of any remaining debts the vehicle has and if the donee will assume those debts
Step 4 – Obtain Signatures
Both the donor and the donee should sign the document.
Step 5 – Notarize the Document (Optional)
While both parties don’t have to sign the affidavit before a notary public, having the document notarized will help verify its authenticity if a dispute arises.
Gift Affidavit Samples
View a sample of a gift affidavit form for a motor vehicle so you can better understand how to structure yours:
If you’re gifting something other than a motor vehicle, you can download another free gift affidavit template below:
- Gift Affidavit (Income): PDF or Word
- Gift Affidavit (Real Property): PDF or Word
- Gift Affidavit (Securities): PDF or Word
- Gift Affidavit (Other – General): PDF or Word
Frequently Asked Questions
Is a gift affidavit a legal document?
Yes. A gift affidavit is a legal document, meaning the gifts you outline are generally irrevocable once you sign and execute it.
Can I cancel my gift affidavit?
A donor can cancel a gift affidavit if the gift is a “gift causa mortis,” which is one based on the donor’s contemplation of death. The giver can demand that the donee return this kind of gift at any time, and it only becomes irrevocable when the giver passes away.
Can someone gift an item to a person on my behalf?
Yes. Someone else can gift items on your behalf. When giving a gift of low value in an informal situation, you may not need a legal document to outline the transaction.
However, you should consider drafting a letter of authorization or a limited (special) power of attorney to grant the stand-in gift-giver official authority to act on your behalf.
