Gift tax

Gift Tax

A gift tax is a tax on transfers over one’s lifetime of property made without consideration (payments). The tax is imposed on the person making the gift and not on the person receiving it. In a calendar year, gifts that are valued over $13,000 and which are given to someone other than a spouse or charity are subject to this tax. And even though a gift ‘tax return’ must be filed on form 709, no tax is required to be paid until the taxpayer exhausts the 5 million dollar limit.

 

Gift tax exclusion

A taxpayer can give any amount of money, up to $13,000 per year, to as many recipients as he or she wishes, and would not be required to file a gift tax return. However, if more than $13,000 is given to any one person, the difference over $13,000 must be reported to the IRS. A married couple, conversely, can each give up to $13,000 annually to any number of recipients and not be required to file a gift tax return.