Can the IRS tax gifts?
Posted By JK Harris on January 22, 2009
Whether the IRS can tax gifts depends on whether you are giving or receiving the gift. If you give any one person a gift or gifts that are valued at more than $12,000, you are required to report this to the IRS, and you may have to pay taxes on it. However, if you have received the gift, you do not have to report it or pay gift or income taxes on it.
These gifts can include anything from money to property. And be careful when selling something. If you sell it for less than its actual value, it may be considered a gift.
There are some gifts that are not taxable, such as the following:
- Tuition or medical expenses you pay directly to an educational or medical institution on someone’s behalf.
- Gifts to your spouse.
- Gifts to a political organization.
- Gifts to charities.
Married couples have slightly different rules. Both you and your spouse can give separate gifts up to the annual limit of $12,000 to the same person without it being taxable. And, with your spouse’s consent, you can make a single gift up to $24,000 to the same person without it being taxable.
For more information on Gift Taxes, you can visit www.irs.gov.
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