Other Tax Issues of Interest

Gift Tax

The gift tax applies to the transfer by gift of any property. You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return. If you sell something at less than its full value or if you make an interest-free or reduced interest loan, you may be making a gift.

The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule.

Generally, the following gifts are not taxable gifts:

1. Gifts that are not more than the annual exclusion for the calendar year,
2. Tuition or medical expenses you pay directly to a medical or educational institution for someone,
3. Gifts to your spouse,
4. Gifts to a political organization for its use, and
5. Gifts to charities.

Gift Splitting
Applying the Unified Credit to Gift Tax
Filing a Gift Tax Return

Important References

Publication 950	Introduction to Estate and Gift Taxes
Form 709	United States Gift (and Generation-Skipping Transfer) Tax Return
Instructions for Form 709