The IRS taxes gifts made over a certain dollar amount. If borrowers plan to use gift money, they must request a gift letter from their lenders.If you give people a lot of money or property, you might have to pay a federal gift tax. But most gifts are not subject to the gift tax. "A gift letter describes who the person is, their relationship with the borrower, and how they will give the gift check, cash, or transfer. Show your computation of the Georgia tax in a cover letter or worksheet. Gift funds may not be contributed from any source that has an interest in the sale of the property (seller, builder, real estate agent, etc.). Use Form 709 to report: Transfers subject to the federal gift and certain generationskipping transfer (GST) taxes. A gift letter is one of the most important legal documents to prove the asset is yours.