---
title: Getting a Gift from Relatives When Buying a Home
description: Homebuyer needs money for a down payment and getting money as a gift from relatives. Is the gift in the form of cash or check taxable?
---

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# [Getting a Gift from Relatives When Buying a Home](https://www.oberlanderandco.com/insights/homebuyer-gift-tax)

 Written by [Jacob I. Oberlander, CPA](https://www.oberlanderandco.com/insights/author/jacob-i-oberlander) | January 18, 2021

John and Jane Doe are happily married with three kids. They decide that it's time to set roots and buy a home. They sit down and run the numbers. They can afford to pay a mortgage; however, they don't have the money for a down payment. John reaches out to his parents, and his parents are generous enough and are offering to help them out with a down payment as a gift. Following are the answers to five common questions that often get asked. 

 

1. The question that gets asked by potential homebuyers is, "Is a gift given to me in the form of cash or check by a relative taxable"?
   
   ***Answer:***  Recipients of a gift generally never owe income tax on the gifts.
2. *Follow-up question*:  can a gift be given tax-free by the donor/giver?
   
   At the risk of losing your interest to continue reading, I'll get to the point – Yes, if it’s $19,000 or less for 2025 and remains at that for 2026.
   
   There is an "annual exclusion amount" every year. For 2025 the exclusion amount is $19,000 per person. Therefore, it would not be subject to gift tax and, no [Gift Tax Return](https://www.irs.gov/pub/irs-pdf/f709.pdf) is due to be filed. 
3. Married couples can combine their "annual exclusions," so each parent can give $19,000, and that would make it $38,000 from both parents combined. If they choose to gift the husband and wife (John and Jane), the total gift amount can be up to $76,000 and be excluded from filing.
   
   If the funds are coming out of a joint bank account, it is recommended that each parent/donor writes a separate check or transfer. If they want to issue a single combined check or transfer, they will be required to file a gift tax return and do a "gift-splitting" election.
4. ***Question:***  since the "annual exclusion amount" can be given to any number of people, can the grandparents include a gift of $19,000 per grandchild?
   
   ***Answer:***  For adult children, yes, but for minors, there is an issue. While the giver/donor can give money to a minor, there are special rules on how the money is supposed to be treated. The money is supposed to be deposited into a UTMA Account or in a trust. This will prevent you from using the money for the down payment.
5. Remember that the donor/giver can always use the "lifetime exclusion," in which case the gift amount can be greater than $19,000.
   
   The "lifetime gift and estate tax exclusion" looks at all gifts you gave greater than $19,000, accumulated throughout your lifetime. For 2025, the "lifetime exclusion" is $13.99 million for individuals and $27.98 million for married couples. Gifts below the "lifetime exclusion" will not be taxable for federal tax purposes. 
6. Question:  Are there any exceptions to the rule? Is there a way for me to be exempt even if the gift is above the annual exclusion amount?   
   **  
   **Answer:  [Per the IRS](https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes#:~:text=Tuition%20or%20medical%20expenses%20you%20pay%20for%20someone%20(the%20educational%20and%20medical%20exclusions).),  tuition or medical expenses you pay for someone is excluded from your annual limit. 

 

↔️ Selling your home and are concerned about capital gain taxes? [Check out this article](https://www.oberlanderandco.com/insights/selling-your-home-capital-gain)

 

We only addressed here the gift and how it affects your taxes. You should reach out to your mortgage broker for guidance on what banks will consider a valid gift.

 

The tax code for gift tax is detailed and complex. The purpose of this article is to only serve as a primer on the topic. Please consult with your tax adviser for further guidance. 

 

Read more FAQs by the IRS [here. ](https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes#6)If you'd like to read more resources, check out [IRC 2503](https://www.law.cornell.edu/uscode/text/26/2503), [IRC 2513](https://www.law.cornell.edu/uscode/text/26/2513), [Forbes Article](https://www.forbes.com/sites/deborahljacobs/2014/04/09/gift-tax-returns-what-you-need-to-know/?sh=666335f3a474) (from 2014), and [Uniform Gifts to Minors Act](https://www.investopedia.com/terms/u/ugma.asp#:~:text=The%20Uniform%20Gifts%20to%20Minors%20Act%20(UGMA)%20provides%20a%20way,assumes%20control%20of%20the%20account.).

 

This blog was updated to reflect IRS 2024 guidelines.

 

[View full post](https://www.oberlanderandco.com/insights/homebuyer-gift-tax)

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