Are Gifts Taxable in the U.S.?


Quick Answer

Gifts are subject to a gift tax, but there are exclusions that allow most gifts to be given free of any tax or filing requirement. The annual federal exclusion for gifts to individuals is $14,000, as of 2013 through 2015.

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Full Answer

As of 2014, gifts to a spouse or to a charity are not subject to gift taxes. Donations to political parties are not considered gifts. Paying education or medical expenses directly to an institution for someone is not considered a gift, for gift tax purposes.

Gift tax, if any, is generally paid by the giver, not the recipient. The recipient does not have to pay income tax on the gifts received. Some gifts require the giver to file a federal gift tax return, Form 706. These include gifts over the annual exclusion, gifts of future interest or use of an object or income, and gifts that are split with a spouse, such as giving $25,000 to a child from a joint bank account. In addition to the annual exclusion, there is a combined gift and estate exclusion. As long as the total gifts given by an individual are under the lifetime exclusion, there are no federal gift taxes due. States have different exclusions and filing requirements.

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