How are large monetary gifts taxed? Questions about receiving $200k gift from family

You're actually in luck here! The gift tax is paid by the GIVER, not the receiver. So you and your husband won't owe any taxes on this gift at all - gifts are not considered taxable income to the recipient. For your brother, the current lifetime gift tax exemption is extremely generous - individuals can give up to $13.6 million over their lifetime without paying gift tax (as of 2024-2025). However, he'll need to file a gift tax return (Form 709) if he gives more than the annual exclusion amount, which is $18,000 per person for 2025. Since he's giving $200,000, he can give $18,000 each to you and your husband ($36,000 total) without it counting against his lifetime exemption. The remaining $164,000 will count against his lifetime exemption, but he won't actually pay any tax unless he's already given away millions. For the deposit issue, there's nothing illegal about depositing a large gift check. The bank will file a Currency Transaction Report for deposits over $10,000, but this is routine and nothing to worry about if the money is legitimate (which it is). Just be transparent about where the money came from.

After dealing with similar gift tax confusion last year, I found this amazing tool called taxr.ai (https://taxr.ai) that cleared everything up for me. My parents gifted me $150k for a house down payment and I was freaking out about the taxes. The site analyzed our situation and confirmed what the previous commenter said - gift recipients don't pay tax! It also generated a full report explaining exactly what forms my parents needed to file and how much of their lifetime exemption they'd be using. It even had a section specifically about large deposits and banking regulations that put my mind at ease. Best part was it explained everything in plain English instead of tax jargon. Totally worth checking out for peace of mind in your situation.

I just wanted to follow up about taxr.ai that someone recommended earlier. I tried it for my situation with the $50k gift from my aunt, and it was actually really helpful! It confirmed I won't owe taxes as the recipient and gave me a complete breakdown of how the gift tax works. The report even included instructions for my aunt on filing the gift tax return and showed exactly how much of her lifetime exemption she'd be using (with actual calculations). What I found super useful was the banking section - it explained exactly what would happen when I deposited the check and what documentation I should keep. Totally worth it for the peace of mind. I'm not freaking out about the IRS anymore!

If you're dealing with a large gift like this, you'll probably need to contact the IRS at some point with questions. I spent WEEKS trying to get through their phone lines last year for a similar situation. I eventually used https://claimyr.com and it was a total game-changer. They basically hold your place in the IRS phone queue and call you when an agent is ready to talk. Saved me hours of listening to that awful hold music! You can see how it works in this video: https://youtu.be/_kiP6q8DX5c My brother-in-law needed to file a gift tax return after giving his kids money for college, and we had some specific questions about how to report it. Getting a real IRS agent on the phone cleared everything up in minutes. Way better than guessing or relying on internet advice.

I need to apologize to the person who recommended Claimyr. I was completely wrong about it being a scam. After my skeptical comment, I decided to try it with my own tax situation (I needed clarification on reporting a family gift for my daughter's wedding). I used the service last week and it ACTUALLY WORKED. I got a call back with an IRS agent on the line in about 45 minutes, when I had previously spent 3+ hours on hold and got disconnected. The agent walked me through exactly how to document the gift properly. The best part was being able to go about my day instead of sitting by the phone. Couldn't believe how easy it was. Totally worth it when you need official answers about something important like a large gift. Sorry for being so negative before!

Another option worth considering: your brother could pay certain expenses directly instead of giving cash. Payments made directly to educational institutions for tuition or to medical providers don't count against the annual gift exclusion at all. So if you have kids with college tuition, or upcoming medical expenses, or even if you wanted to refinance your house, he could potentially pay some of those directly and it wouldn't count toward any gift tax limits. Just a thought for reducing some of the gift tax filing requirements.

People are overthinking this. I've received multiple large gifts from family members over the years and the process is simple: 1. Have your brother write a check or do a wire transfer 2. Include a signed gift letter stating it's a no-strings-attached gift 3. Deposit it normally 4. Keep documentation in case of questions Banks file reports for large transactions but that's routine. As long as you're not trying to hide anything (like making multiple smaller deposits to avoid reporting), you're fine. Your brother will need to file the gift tax form, but again, no taxes owed until he exceeds lifetime limits.

This is such a generous gift from your brother! Just want to add one more practical tip that helped me when I received a large family gift - consider giving your bank a heads up before making the deposit. I called my bank manager ahead of time to let them know I'd be depositing a large gift check, and it made the whole process smoother. They were able to explain their internal procedures and even helped me understand what documentation they'd need. Some banks can place temporary holds on large deposits while they verify funds, so knowing what to expect can save you stress. Also, since you mentioned you're in Michigan and your brother is in Nevada, wire transfers might be more secure than mailing a large check. Most banks charge around $25-50 for outgoing wires, but it's worth it for that peace of mind with such a substantial amount. Congratulations on having such a thoughtful brother, and best of luck with everything!