Hello, this year I helped my parents buy a car by paying a dealership in full (about $40,000) with a cashier's check because my parents didn't have enough cash on hand for such. The car's title only has my 2 parents' names on it. My parents intend to pay me back, but we didn't have a formal loan agreement as I didn't quite understand gift tax reporting well until doing more research afterwards. As such, I am thinking I will need to file Form 709 for gift tax reporting.
- Am I correct in thinking I will need to file Form 709 for gift tax reporting for tax year 2023?
- If so, does it make sense for me to break down the purchase as 2 separate gifts of about $20,000 to each parent since both parents' names are on the car title?
- My parents would want to avoid the need for gift tax reporting when they reimburse me from their joint bank account. To achieve such, should they only reimburse me for the max gift tax exclusion amount per year (currently $17,000)? Or can they they reimburse me in 2 transactions from their joint bank account to make it clear each parent is using up their respective max gift tax exclusion amount for the year?
Thank you for your time.
