Gift Tax

You can give gifts totaling $13,000 or less to any one person per year without paying the gift tax. If you give over $13,000, the gift tax owed will be figured on the amount over $13,000 only. Your spouse can also give $13,000 or less to the same person during the same year without incurring a tax liability.

The gift tax is paid by the gift giver, not the receiver. The person receiving the gift does not need to claim the gift as income.

Gifts can include money and property, and are considered gifts if nothing is received in return. You may also be giving a gift if you sell something below its value or even if you make a loan.

Generally gifts of tuition, medical expenses, gifts to your spouse, political organizations or to charities are not counted in the gift tax annual limits.

If you are giving a substantial amount of money or property to one person, you should contact a lawyer to get advice about the best way to handle the transfer.

For more information about gift taxes, take a look at IRS Publication 950, Introduction to Estate and Gift Taxes or contact your nearest Liberty Tax office.