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My Grandmother has very generously offered to give me and DH $25,000 towards buying a house. As I understand it, she can give us each $12K without having to report it to the IRS and pay gift taxes.


Could she give the extra $1000 that's left in my daughter's name? (Said daughter is 7 months old.)

Sure, but that would have to go into an account in your daughter's name (a "UTMA" account) which must be used solely for your daughter's benefit. You can't make a 7 month old pay for housing, so the bottom line is, no, she can't slip you an extra $1,000 this way. Nor can she "give" it to Aunt Fanny who then "gives" it to you. Nor can she [any other scheme to get around the limits].

Does she need to write us each separate checks for the gifts to count as being to different people?

She should.

Also, she told me that she was once told that when you take more that $10,000 out of your bank account at once the government comes to investigate. I seriously think she has images of men in black suits pounding on her door wanting to know what she did with the money. While I am certain that won't happen, does anyone even look into it if you take a large sum out of your bank? I know that probably sounds nuts to ask, but I'm trying to humor my grandma, she is giving us a very nice gift after all.

The men in black suits are much more interested in money going into your account than they are in money coming out of it. You may have trouble disabusing her of this notion, but her concerns are, what's that word I'm looking for, uh, oh, there it is in your subject line, "crazy."

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