Bank transfer between family members. What is the reason for entry? How to avoid tax checks

It is not enough to write “xxx” in the reason for a bank transfer: it is important to enter the correct wording to avoid penalties or problems with the tax authorities.

In times of great economic hardship, you may have had to do this Ask a friend or relative for a loan. In the latter case, though, the family is at best always willing to help you, however The IRS may not always turn a blind eye to excessive family generosity.

So how can you send money via bank transfer to family members without incurring tax penalties?

Let's start by saying that By law there are no economic restrictions imposed on family transfers. So you can send very large amounts to brothers, sisters, children or parents, but always keeping one detail in mind. At the time of shipping, you will need to state the “reason” you are arranging the bank transfer, specifying The “reason” in the subject of the shipment. The reason must always be clear, as unambiguous as possible, justified and demonstrable through traceable payment instruments. Therefore, we can write, for example, “interest-free loan”, “gift”, “donation”, “gift” or other clear justification for the reason for that transfer. In this way, we will inform the Revenue Agency of the nature of the transfer and our intentions.

What to do if the transfer involves large amounts?

It is true that there is no legal limit for sending money, but it is also true that tax authorities tend to monitor transfers of large amounts. second the art. 782 of the Civil CodeDonations of large sums of money are considered invalid if they are not made in the presence of at least three people, usually a notary and two witnesses. According to art. 783 However, donations of this type do not require a notary. However, it is important that the size of remittances and donations be economically sustainable for the donor: if the donor does not suffer from significant poverty, The donation may be considered to be of “modest value.”. In case the reason for the wire transfer is incorrect, it may be possible Incur financial penalties, or worse, criminal consequences.