What Is Federal Rate of Taxation on Monetary Gifts Received?

What Is Federal Rate of Taxation on Monetary Gifts Received?

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.

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.