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 Gift GivingCourtesy of IRS If you gave any one person gifts valued at more than $11,000, it is necessary to report the total gift to the Internal Revenue Service. You may even have to pay tax on the gift. The person who received your gift does not have to report the gift to the IRS or pay either gift or income tax on its value. You make a gift when you give property, including money, or the use of or income from property, without expecting to receive something of equal value in return. If you sell something at less than its value or make an interest-free or reduced-interest loan, you may be making a gift. There are some exceptions to the tax rules on gifts. The following gifts do not count against the annual limit:
If you are married, both you and your spouse can give separate gifts of up to the annual limit to the same person without making a taxable gift. For more information, get:
They are available for downloading (click the names) or
by calling
toll free 1-800-TAX-FORM (1-800-829-3676). TAXMAMA NOTE.... What IRS didn't say in this little article, is that you can avoid paying the gift tax by using up a portion of your estate tax allowances. In other words, if the non-taxable estate tax limit is $1,500,000 and you give someone a gift of $50,000 - here's what you would do:
Then, deduct this from the $1.5 million - and that does two things. It makes the $39,000 gift non-taxable, presently. And it reduces your ultimate non-taxable estate to $1,461,000...which of course, will change as the estate tax limits increase... To take advantage of this, you MUST file the Gift Tax Return, Form 709.]
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