A Gift Transfer Affidavit is a formal, notarized legal document that certifies an asset—like a car, boat, or property—was transferred from one party to another as a gift without any money or consideration exchanged. Its primary function is to distinguish gifts from sales, ensuring that recipients are not mistakenly charged sales tax when registering or titling the gifted asset.
This affidavit is commonly required by state agencies such as Departments of Motor Vehicles (DMV) or county recorders to validate the transfer and comply with respective tax laws. Without it, automatic sales tax may be imposed, as the default assumption is often that the transfer was a purchase.
To complete a Gift Transfer Affidavit, both the donor (giver) and donee (receiver) fill out the document with pertinent details, including identifying information, a description of the gifted item (e.g., vehicle make, model, VIN, or property address), and a sworn declaration that no payment or other value was exchanged. Both must sign the affidavit in the presence of a notary public, making it legally binding.
Common uses include:
- Transferring vehicle titles without sales tax liability.
- Documenting real estate gifts alongside deeds such as quitclaim or gift deeds to clarify ownership and tax implications.
An important tax note: while the affidavit helps avoid sales tax on the recipient’s side, the donor must still consider federal gift tax rules. In 2024, gifts exceeding $18,000 per recipient may require the giver to file IRS Form 709, though most do not owe tax due to lifetime exemptions. For more on gift tax obligations, see our glossary explanation of Form 709 – United States Gift (and Generation-Skipping Transfer) Tax Return.
Because state requirements vary, always check your local DMV or tax assessor’s guidelines before submitting a Gift Transfer Affidavit. Notarization is critical for validation, and keeping copies for your records is advised.
Common misunderstandings include thinking the affidavit eliminates all taxes—while it often exempts sales tax, federal gift tax or property taxes may still apply. Also, the affidavit is not a casual note but a sworn legal statement; misuse or false statements can result in penalties.
For detailed state-specific instructions, visit your state’s vehicle registration or county recorder websites, like the NYS DMV’s guide on gifting vehicles.
This legal tool helps streamline the transfer of gifted assets, ensuring clarity and compliance for both givers and receivers.
