Is Your Gift Taxable? 1. Most gifts are not subject to the gift tax. For example, there is usually no tax if you make a gift to your spouse or to a charity. If you make a gift to someone else, the gift tax usually does not apply until the value of the gifts you give that person exceeds the annual exclusion for the year. For 2011 and 2012, the annual exclusion is $13,000. 2. Gift tax returns do not need to be filed unless you give someone, other than your spouse, money or property worth more than the annual exclusion for that year. 3. Generally, the person who receives your gift will not have to pay any federal gift tax because of it. Also, that person will not have to pay income tax on the value of the gift received. 4. Making a gift does not ordinarily affect your federal income tax. You cannot deduct the value of gifts you make (other than deductible charitable contributions). 5. The following gifts are not taxable gifts: • Gifts that are do not exceed the annual exclusion for the calendar year, • Tuition or medical expenses you pay directly to a medical or educational institution for someone, • Gifts to your spouse, • Gifts to a political organization for its use, and • Gifts to charities. 6. You and your spouse can make a gift up to $26,000 to a third party without making a taxable gift. The gift can be considered as made one-half by you and one-half by your spouse. If you split a gift you made, you must file a gift tax return to show that you and your spouse agree to use gift splitting.
Posted on: Fri, 12 Jul 2013 01:35:47 +0000
Trending Topics
Recently Viewed Topics
© 2015