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
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