In New Mexico law, a gift is defined as anything of value that one individual transfers to another without receiving anything of commensurate value in return. The giving of gifts in New Mexico does not have any tax consequences for the donor under state tax law. However, the recipient wants to make sure that the receipt of a gift does not give rise to income tax liability for them under New Mexico and/or federal income tax law.
Federal tax law does include gift tax provisions. Of course, federal law is the same in all states in the U.S., and New Mexico is no exception. Federal gift tax law is enforced by the federal Internal Revenue Service (IRS). When an individual plans to make a gift, they need to take into account federal gift tax laws and regulations. Estate law considerations may also present issues when large gifts are made, and need to be considered.
This is why a person would want a legal consultation in New Mexico with a New Mexico lawyer when they are planning a significant gift.
Federal tax law imposes gift taxes on transfers of money or property that exceed certain limits. There are annual limits on gifts and lifetime limits. In 2025, an individual may give property with a value of as much as $19,000 per recipient in any one year. There would be no federal gift tax consequences.
Married couples can each give up to $19,000 in 2025 to one recipient. So spouses together may make a gift or gifts worth as much as $38,000 per recipient per year.
If a person should make a gift with a value of more than $19,000 in one year, they need to file a completed Form 709 with the IRS. The form requires the person to report the gift and its value. The reporting on the Form 709 allows the IRS to keep track of the value of an individual’s gifts across their lifetime. The IRS would then know whether the lifetime total exceeds the lifetime gift tax exemption.
The IRS keeps track of the value of gifts that exceeds $19,000, or whatever the amount of the annual exclusion is, per recipient in one year. The excess above $19,000 is the amount that is totaled over a donor’s lifetime. The federal gift tax only applies when this lifetime total value exceeds the lifetime exemption of $13.92 million.
There is another consequence of a person’s lifetime total, and it is that the total amount of gifts reduces the amount available for federal estate tax purposes upon the death of the donor.
Estate law and federal gift tax law work together, so an individual who is thinking of making gifts with significant values in their lifetime should consult a New Mexico estate lawyer for guidance.
There are types of gifts that are not included in the calculation of the annual exemption. They would not have any gift tax consequences. A donor might directly pay a school or college for the tuition of another individual. Or a donor might pay the medical bills incurred by another person. Payments such as these would not be counted towards the donor’s annual IRS gift tax exclusion amount. So amounts paid for these purposes, even if they exceed $19,000 in one year, would not add to a person’s lifetime total.
In New Mexico, How Can I Prove the Elements of a Gift?
The elements of proof for a gift are the same in New Mexico as in most other states in the U.S. A transaction that counts as a valid legal gift depends on five conditions as follows:
- Delivery: An item of personal property must be handed over to the recipient. If the donor makes a gift of real property, the donor must deliver a gift deed that complies with the requirements of New Mexico law for transferring an interest in property.
- Intent: When they deliver property to the recipient, the donor must have the intent to make a gift.
- Acceptance: The item given by the donor must be accepted by the recipient.
- No Exchange of Value: As mentioned above, the recipient must not give anything of value to the donor in return for their gift.
- Mental Competence: Both the donor and the recipient must have mental competence. This means they have not been subject to any undue influence or duress. The donor must not have been motivated to make a gift by fraudulent misrepresentation.
As in any case, evidence would be facts to which witnesses can testify or facts of which documents give evidence. Available evidence would have to show that the five conditions were present in a transaction.
What Can Be Transferred as a Gift in New Mexico?
In New Mexico, the law defines a gift as any type of consideration, including the provision of food, lodging, transportation, and tickets for entertainment or sporting events. Of course, giving another person money, jewelry, cars, clothing, furniture, and works of art. Any time a person gives an item of property to another without any tangible return, they make a gift.
Gifts can be made of intellectual property. Such things as copyrighted artworks or musical compositions, trade secrets, and trademarks can be given as gifts. It is a common form of charitable donation for the owner of such property to make a gift of it to a charity of their choosing.
These donations are, however, subject to the federal gift tax and may also have income and estate tax consequences. Experts advise getting the guidance of a New Mexico estate planning lawyer before making a gift of intellectual property.
Real property can be given as a gift, and many people give real estate to their children or other family members. There are gift and possibly income tax consequences to a gift of real property. This could make bequeathing property in a will a better choice. A person would want to consult a tax lawyer before making a gift of real property.
New Mexico property law requires the filing of a form referred to as a “residential property transfer declaration affidavit” (RPTDA) when a non-exempt deed is recorded, which is one that transfers residential real estate to a new owner. The RPTDA includes the names of the parties to the transaction, their addresses, a description of the property, the value of the property, and the consideration paid for the transfer, if there was any.
Deeds between a parent and child or between spouses that do not involve giving consideration for the property, i.e., a gift, are exempt from the RPTDA requirement. Other types of deeds are also exempt from this requirement, but not deeds for gifts of property given to someone other than a parent, child, or spouse. In these latter transactions, the RPTDA would be necessary.
Can I Legally Take a Gift Back in New Mexico?
If an individual who made a gift were to be able to prove that they only made the gift because of a fraudulent misrepresentation or because they were subject to duress or coercion, then they might be able to revoke the gift.
An exception to the rule that a gift of property cannot be revoked is a gift that is conditional. This is a gift made on the condition that a certain event happens in the future. Courts enforce conditions placed on gifts if the condition is expressed clearly and specifically. Conditional gifts are more common in wills, where, for example, a grandparent might bequeath money to a grandchild on the condition that they earn a college degree.
Also, the condition would not be enforced by a court if it is illegal or violates public policy. For example, if the condition requires the recipient to do something illegal or harmful to others, a court would not enforce it. A gift that prohibits a person from getting married is one that would not be enforced because it would be contrary to public policy.
With respect to real property, however, there are some special rules. If an individual has complied with the New Mexico law regarding gift deeds and a valid gift deed has been filed with the County Recorder in the county where it is located, the gift becomes irreversible. A person thinking about making a gift of real property wants to remember that property deeded to someone becomes subject to the claims of their creditors.
Do I Need a Lawyer for Assistance With a Gift?
If you have been thinking about making some gifts, whether of personal or real property, you want to talk to a New Mexico estate lawyer first. Making gifts can become complicated from the perspective of taxation and other legal issues as well. You want the advice of a lawyer so that all the possible consequences are considered, especially the tax implications.
