What is a gift for federal tax purposes?
A “gift” transaction is one in which you give more property than you receive (if anything) in return. It can be a gift of money or the transfer of a property, like a home for less than fair market value. Services rendered, like providing homecare or mowing the lawn, do not constitute gifts.
Are all gifts subject to the federal gift tax?
No. Items excluded from gift-tax liability include the following:
- Gifts under the annual exclusion amount, $14,000 per recipient per year in 2016.
- Gifts made between spouses.
- Contributions to charity.