The letter must explain who is gifting the money, where the donor's funds are coming from and the relationship between the donor and the recipient. A gift letter is an important, formal, legal piece of documentation that can help explain that a (usually rather large) sum of money was gifted to you.Your parents will need to file the proper forms with IRS declaring the gift. So no potential consequences of gift tax. A mortgage gift letter is a statement that assures your lender the money that came into your account is a gift and not a loan. These instructions are for the filing procedures in the Department of Court Records. They are not legal advice.