Q:

What is federal rate of taxation on monetary gifts received?

A:

Quick Answer

The federal gift tax rate is 40 percent as of tax year 2014, according to TurboTax. However, taxpayers can give up to $14,000 per recipient per year without triggering the gift tax. The recipient is not responsible for income tax on gifts of $14,000 or less.

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Full Answer

The Internal Revenue Service puts a lifetime cap on gifts, notes TurboTax. This limit is $5.34 million over the course of a lifetime. This limit only includes gifts given over the $14,000 limit. For example, if a taxpayer gives $20,000 to one person, then $6,000 would count toward the lifetime limit of $5.34 million.

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