Money Gift Letter from Parents: Format (with Example)

A money gift letter from parents is a formal document written by the parent(s) to officially record a gift of money to a child or children. This letter provides proof that a parent or parents are giving a monetary gift to their child. These letters may be required to ensure that neither the parents nor the child pays taxes on the gift. This gift letter should include a statement that the money is a gift and that no repayment is expected or required.

If the monetary gift is intended for use in a particular purchase, the letter must clearly state the item being purchased. For example, parents sometimes offer gifts for down payments on mortgages. These gift letters should state the address of the home being purchased.

This letter also documents the gift for tax purposes. A parent is allowed to give $15,000 to each child every year in the United States before the gift needs to be considered for tax reasons. Both parents can do this, so together, they can give each child $30,000 every year before reporting the gift.

If a parent gives more than $15,000 in a year to a child, the amount over $15,000 should be reported on their taxes. This overage goes toward the parent’s lifetime gifting limit before it is taxed. Each individual has a lifetime gifting limit of $5.6 million in the United States, so a couple may give up to $11.2 million in total before they are required to pay taxes on gifts.

Every country has a different policy regarding the taxation of money gifts. Please check your country’s tax laws for gift-giving before writing your letter.

When you write your monetary gift letter, remember the primary purposes of this letter. These purposes are: first, to note that no repayment is expected or required, and second, to document the gift for tax purposes.

You can use the basic format provided below. Be sure to use the information required by your county’s tax laws. Also add any information required by the purpose of the gift, such as the address for a home to be purchased.

Below the basic format is a sample letter to demonstrate its use in a money gift letter from parents. This basic format can be used for a gift from one or both parents.

Related: 53 Useful Birthday Gifts for Mom from Daughter

Money Gift Letter from Parents (Word Template)

• This letter documents that the gift is not expected to be repaid
• It also documents the gift for tax purposes
• Remember to include the details about the item to be purchased if necessary
• Check your country’s tax laws when gifting money to your children
• Using a basic format like the one above ensures your letter contains all the information required