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Gift Letter Format

[Your Name]
[Your Address]
[City, State, ZIP Code]
[Email Address]
[Date]

Recipient’s Name
[Recipient’s Address]
[City, State, ZIP Code]

Subject: Gift Letter

Dear [Recipient’s Name],

I, [Your Name], residing at [Your Address], am writing to confirm that I am providing a gift of [Specify Amount or Description of Gift] to [Recipient’s Name], who resides at [Recipient’s Address]. This gift is being given voluntarily without any expectation of repayment, compensation, or services in return.

Details of the Gift

I declare that this gift is being provided from my own funds, and I have no financial interest in how [Recipient’s Name] utilizes it. I also confirm that there is no obligation for repayment now or in the future.

If further clarification or documentation is required, I am available to provide any additional information.

Thank you for your attention to this matter.

Sincerely,

[Your Full Name]
[Signature]
[Date]

Notarization (Optional, if required)

Notary Public
Signature: ______________________
Date: __________________________
Stamp/Seal:

Gift Letter Samples

What is a Gift Letter?

A gift letter is a written statement that certifies the transfer of money, property, or assets from one person (the donor) to another (the recipient) as a gift. This sample letter explicitly declares that the funds or property are given without the expectation of repayment. In real estate, gift letters are often required by lenders when the borrower uses gifted funds for a down payment. They ensure that the borrower is not incurring additional debt, which could impact their ability to repay a mortgage.

The Basic Parts of a Gift Letter

Key Elements of a Gift Letter

A gift letter that does not contain crucial information only makes it useless. And if you are wondering what the essential parts or details to discuss in a gift letter are, these are the elements you have to watch out for:

Name of Donor: If donors and recipients under a gift agreement need to state their names in an agreement form, then the same can be said about mentioning the donor and the recipient’s details in a gift letter. This part of the letter clearly states who sent the gift and who received it.Donor’s Address and Contact Details: The donor’s address is helpful for tracing, in case there are questions to ask. The same goes for their contact details from the phone number, email address, mobile number, and other important contact lists.Donor and Receiver’s Relationship: Define the relationship between the donor and the receiver. Whether they are friends, relatives, business partners, or any form of relationship, labeling this part is also needed for evidence purposes.Exact Amount of Gift: Just like your typical cost sheet, you should determine the exact amount of gift given in words and numbers. This is a critical part of the letter because the receiver should expect to receive the exact amount promised in the document. But if the gift isn’t monetary, then proceed to determine its value so there is still an amount of cost to jot down.Date: Write down the complete date of when the gift was given. Similar to payment schedules in payment forms, the day, month, and year should be clarified. Others are even more detailed by also mentioning the time involved.Official Statement: The donor should come up with a sworn statement that explicitly mentions having no repayment needed for the gift. Having this statement alone is useful for legal evidence.Donor and Recipient’s Signatures: A gift affidavit that contains both the donor and the recipient’s signatures is more credible than those documents without any affixed signature. Remember that any gift letter can be made up, so at least signatures are around for proof.Address of Property Being Bought: This segment in a gift letter is only meant for gifts that involve properties like house purchases. Hence, it is optional. And the complete address marks where the exact property is if ever that concern needs investigation.

How to Create a Gift Letter

How to Create a Gift Letter

Believe it or not but gift letters are not that difficult to prepare. Using simple words in plain English and in one page alone can already work. But, it doesn’t mean you just take its content and data for granted. It must answer the important questions and be reliable enough for evidence. In this section, you will learn about the steps on how to make a decent gift letter.

Step 1: Select a Sample Gift Letter Template

The hassle of making a gift letter from scratch won’t bother you anymore when you use the sample gift letters enlisted in this post. You have plenty of templates to choose from and you can even customize your letter afterward. Thus, you have the leeway to change the format, design, and other contents of the gift letter. Ensure that you are confident about the output of your digital or printable document in the long run, especially when you are the donor who is about to send it to the recipient.

Step 2: Identify the Gift Itself

Don’t make a gift letter just yet without having enough background about the gift itself. As the sender or the one designated to make the gift letter, full knowledge about the gift is required. That way, you would know what to write about in the gift letter. This brings you to know if the gift is in a form of cash, a gift certificate, a loan, or anything else. And what is it for? Is it for a birthday gift, wedding gift, or any other reason at all? Also, this leads you to determine the type of gift letter you are going for. You can also see more on Donation Request Letters.

Step 3: Complete the Parts of a Gift Letter

Besides the types of a gift letter, you also know that there are standard parts of a gift letter, which were already discussed. So do not forget to insert the donor’s name, gift amount, down to the affixed signatures to complete your gift letter. Remember that lacking any significant detail could lessen your letter’s credibility. And you should not only add the parts as it is because you need to organize them into categories or by sections. How you organize that is up to you.

Step 4: Keep It Direct and Simple

Most importantly, don’t complicate things. A simple and straightforward gift letter will already suffice. That means you stay direct to the point about the message you are trying to say in the letter and that the words are easily understandable for the recipients. That way, you prevent unnecessary and flowery words that only weaken your message. Come up with a final evaluation of the whole document before you actually produce and submit it. You can also see more on Confirmation Letter.

In summary, a gift letter is a critical document in financial transactions, especially mortgages. It ensures transparency, supports lender requirements, and prevents disputes. By clearly stating the gift’s nature, it simplifies the process and ensures compliance, making it an essential tool in modern financial dealings.

FAQs

Does a gift letter need to be notarized?

You can notarize a gift letter to make it credible enough but it doesn’t exactly need to be notarized. If the donor and the recipient already affixed their signatures in the letter, then that document is valid enough. You can also see more on Acceptance Letter.

What are the different forms of gifts?

Gifts may come in cash, check, and most tangible products. Other forms include below-market loans and forgiving debts. Another form is by transferring a title to a property or stock without any value exchange.

Does a mortgage gift letter need an IRS report?

No, recipients need not report about the mortgage gift to the IRS nor pay the gift according to its value. Equal value exchange is unnecessary when money or properties are gifted anyway. You can also see more on Anniversary Letter.

What information should be included in a gift letter?

A gift letter must include the donor’s name, recipient’s name, gift amount, purpose, a statement that the gift is not a loan, and the date of the gift. Signatures from both parties are also essential for legal and financial documentation.

Can I gift money to someone without a gift letter?

Yes, you can gift money without a gift letter, but it is recommended to use one for documentation purposes, especially if the recipient is applying for a mortgage. This ensures the bank or lender has proof of the source of funds. You can also see more on Proposal Letter.

How does a gift letter affect mortgage applications?

A gift letter is crucial for mortgage applications if a borrower uses gifted money for a down payment. Lenders need assurance that the funds aren’t borrowed. This document strengthens the borrower’s eligibility and ensures the lender that no additional debt is being incurred.