My Father-in-law is looking to gift my wife and I, 200k. What are the gift tax implications for him in doing so?

[DoninGA]

Gifts received are not reported on a tax return, regardless of the amount received.

Unless he has gifted over $12.92 million (2023) in his lifetime there will be no federal gifts taxes to pay.  However, if the gift given is over $17,000 (2023) to any individual he is required file an IRS Form 709 to report the gift(s) given.  The Form 709 is a separate IRS form and is not included with his tax return.  It is mailed to a separate IRS address then the return.

Go to this IRS website for the Form 709 (2022) - https://www.irs.gov/forms-pubs/about-form-709

TurboTax does not support IRS Form 709.

[tagteam · Accepted solution]

There are no tax implications for your father-in-law giving you and your wife a cash gift beyond filing a gift tax return (Form 709) with the IRS.

See https://www.irs.gov/instructions/i709#en_US_2022_publink16784xd0e314

Note that there is an annual exclusion of $17,000 (per person/donee) for the 2023 calendar year which means he could give you and your wife up to $34,000 without having to file a gift tax return.

See https://www.irs.gov/instructions/i709#en_US_2022_publink16784xd0e649

Also note that your father-in-law will not actually pay any gift tax unless he exceeds his lifetime exemption, which is currently $12.92 million.

[jn2rons]

To confirm... him completing the IRS Form 709 basically tallies the amount "gifted" for future reference? 

There aren't any penalties that he'd incur on this 1-time gift?

[tagteam]

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@jn2rons wrote:

To confirm... him completing the IRS Form 709 basically tallies the amount "gifted" for future reference? 

There aren't any penalties that he'd incur on this 1-time gift?

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That is correct on both counts.