Is it possible to gift $56k from one family (of 2) to another family (of 2) so that we can write 1 check from joint account and they can deposit into their joint account.

Forum|Forum|7 years ago
June 7, 2019
1 reply
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my close friend requested to loan $50k for 6 months for homebuying and i dont want to charge interest and avoid IRS hassle..is it possible to gift $56k from one family (of 2) to another family (of 2) so that we can write 1 check from joint account and they can deposit into their joint account.

ScruffyCurmudgeon

Alumni - Champ

Gifts that exceed the allowable excludable amount of $14,000 per year given by one person to one other person must be reported on Form 709 Gift Tax Return (not part of the Income Tax system). So, in your situation, one could. Use the exclusion as follows.

A married couple, for example, holding a joint bank account could each create a gift of the $14,000 per each of the couple to each of the other two people, thus 2 X $14,000 X 2 = $56,000.

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Opus 17

Level 15

I have not seen anything in the tax code that says that 4 separate checks are required. However, you may want to prepare a "gift letter" that details the arrangement, and keep a copy with your records.

Also beware, the lender will probably require a gift letter that says that the money is a gift and does not have to be repaid. This is because the lender does not want the borrower to have additional undisclosed or secret loans. If the home purchase has a problem, or if your friends' finances have a problem, or your relationship has a problem, they can use that gift letter to argue that they don't owe you any repayment. It could make suing them very difficult.