Gift Tax Considerations for a $220k Lump Sum Mortgage Payment Gift from a Friend

[guri0121]

My friend plans to pay $220,000 directly to my mortgage company as a gift, but I'll still have mortgage payments to make. Would I need to pay gift tax on this amount?

[Mike9241]

no. true gifts are not taxable to the recipient, but your friend will need to file a gift tax return. 

[xmasbaby0]

Gifts given to family members, friends or other individuals are not deductible.   Gifts received are not taxable to the person who received the gift, and are not entered on a tax return.

If your gift exceeds the yearly limit ($17,000 per individual)  imposed by the gift tax rules, then you will need to complete a Form 709 gift tax form and send it to the IRS, although it is very unlikely that you will owe any tax.    In 2024 that yearly limit will increase to $18,000.

TurboTax does not support Form 709.  It is not an income tax form and would not be included as part of an income tax return.

Here is a link to the form:

https://www.irs.gov/pub/irs-pdf/f709.pdf

https://turbotax.intuit.com/tax-tips/estates/the-gift-tax-made-simple/L5tGWVC8N

[pk]

@guri0121 , agreeing with my colleagues   @Mike9241  & @xmasbaby0 , I would just like to add that  if the  donor ( of the gift  )  is not a US person   ( citizen/ GreenCard /  Resident for Tax Purposes ), then  gift amounts  >=  US$100,000  would require the recipient to file a form 3520.  This just informational; filing and has  NO  tax implications.    TurboTax does not support this form and  one would need to download this form from the IRS, fill out and send it in  per instructions.

Hope this helps