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. The first $10,000 you give someone during a calendar year (the annual exclusion).
2. Tuition or medical expenses you pay for someone (the tuition and educational exclusions).
3. Gifts to your spouse if your spouse is a U.S. citizen.
4. Gifts to a political organization for its use.
5. Gifts to charities if you transfer your total interest in the property or gift to a qualified charity.

Gift Splitting
Applying the Unified Credit to Gift Tax
Filing a Gift Tax Return
Form 709

Important References

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