Q:

What are the 2014 gift tax rules?

A:

Quick Answer

The 2014 gift tax rules include the ability for a taxpayer to make an unlimited number of tax-free gifts of no more than $14,000 each to different individuals, explains TurboTax. The lifetime tax-free allowance as of 2014 is $5.34 million.

Continue Reading

Full Answer

A taxpayer can give away as much as he wants to throughout the year as long as he does not give away any more than $14,000 to each individual, states TurboTax. The IRS imposes a federal gift tax for people who give gifts, not the people who receive them. Taxpayers do not owe any gift tax until they've given away their lifetime allotment of over $5 Million. That amount may rise over time due to inflation.

For the purposes of income tax, a gift is a transfer or property that is less than its full value, meaning if the gift giver is not fully paid back, the transaction is considered a gift, explains TurboTax. Gifts that are not considered taxable in 2014 include present-interest gifts, meaning the person who receives the gift has the right to use or enjoy the gift right away. Gifts to a spouse who is a United States citizen are tax free, but gifts to foreign spouses are subject to a yearly limit of $143,000 in 2014. Gifts to pay for educational expenses are not subject to gift tax in 2014, but those expenses must be for tuition only.

Learn more about Taxes

Related Questions

Explore