Good morning - this is an interesting thread. In part because it has two phases, a mortgage down-payment that has been made and an ongoing monthly payment. It sounds as though everything has been done with/thru the mortgage company and sellers...no money changed hands directly from parents to children. (not a gift) Your child is living in a house she doesn't pay for (a gift). But if something happened to you & your hubby, she would bear the full financial obligation of the mortgage (not a gift). She is on the loan (not a gift) She didn't contribute to the down payment (a gift) but she also didn't receive the down-payment, it went straight to a third party (not a gift.) You and your husband participate in owning the home (not a gift, it is mostly your property). She has a share of ownership (a gift) but the value of that ownership is questionable (suppose she sued for severance and tried to sell 30% of a primary residence...any interest buyers?...nope...not a gift as it doesn't have marketable value - the house isn't owned in an LLC or S-Corp with marketable fractional ownership.) She doesn't participate in the mortgage payments (a gift) but the Annual gifting limit of 2 living parents to a child is $17,000 in 2023 and $18k in 2024 Per Giver...so mom and dad can give a total of $36,000 to daughter this year...if mortgage plus HOA is less than $34k in 2023 then no gift tax reportable. Based on the numbers in the thread...$200k down and $1400 per month I'm guessing the house is in the $400k-$500k ballpark? So, what is a completed gift? It is when the recipient has full-control of the asset. Technically, she doesn't. When the asset has no liens for which she is personally responsible. She does have debts and liens, she is on the mortgage. My very first impulse put me on team "Gift" but then I thought it through in detail and switched to "Team No Gift" for the following reasons: daughter doesn't have anything of value she can sell free & clear, daughter didn't receive funds for down-payment, monthly payments are less than reportable gift tax. Additionally, daughter does have liability for a debt should Parents be unable to make payments. It ultimately comes down to how aggressive/conservative you want to be...is your net-worth over the existing estate tax exemption of $13.6 MM? If so, perhaps you want to be more conservative and file a Gift Tax Return "just because." But I think a gift tax return would be more paperwork than actual progress in this instance.
