Legal Question in Real Estate Law in California

Re: 3,000 deposit funds

Generally just your statement that it was a gift should be sufficient. I suppose it could be based on the purpose of the gift, but current law allows anyone to give up to $11,000 as a gift to anyone else annually.

Is this a real estate agent requesting where the income came from? If so, then the other person's bank statement (or a copy of the check if it was given that way) should also suffice.

If you would like to discuss this matter further in a more private forum, please feel free to contact me directly at the email address provided by LawGuru or through our firm�s website located at PasadenaEstatePlanning.com

IMPORTANT:

No attorney-client nor confidential relationship is created through this communication. You may not rely in any way on this communication, and nothing herein constitutes legal advice nor legal opinion. Your issue may be time-sensitive and may result in a loss of rights if you do not obtain an attorney immediately.

Re: 3,000 deposit funds

I think it depends upon who's asking, and why. Mr. Linden's answer covers two of the possibilities--the IRS from a tax-treatment standpoint, and a lender from an ability-to-pay/debt load point of view.

Another possibility is in the context of a property purchase, where X goes on title but Y's money was used for the down payment. There is a legal principle that whoever paid for the property (Y) is the true owner, and the person on title (X) merely holds title for the other as a kind of involuntary trustee, unless it can be shown that Y intended to make a gift of the property to X.

If X is Y's son, for example, a gift will be presumed, but facts can be placed in evidence to show that the purchase money was not a gift. On the other hand, if X and Y are strangers, or are well-acquainted but are tough business competitors, it will be presumed that Y did not intend to make a gift to X.

So, if you are in court, perhaps before a jury, proving that a sum given or paid was a gift, and not a loan or a mistaken payment, will depend heavily on the relationship of the parties. The jury will see it as reasonable that $3,000 given by a father to a son or by a father-in-law to a new son-in-law is a gift. The jury will be VERY suspicious of any claim that money given to, or paid on behalf of, a business associate is a gift. They will think it might be a loan; it might be a bribe; it might be an investment; it might even have been obtained by threat, stealth or fraud -- but no way did one of these guys intend to give the other a gift!

So, I think inherent believability of the story or claim that it's a gift is a major factor.