Q:

Is there a limit on gift tax?

A:

Quick Answer

The U.S. Internal Revenue Service set the annual gift exemption for the year 2015 at $14,000, according to IRS. However, the annual exclusion gifts do not count in the lifetime gift exemption.

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Full Answer

A gift is a transfer made to an individual without receiving consideration of money or money's worth in return. The donor pays the gift tax, notes the IRS. Other gifts exempted from tax include medical and tuition payments to individuals, gifts to a spouse, and donations to political organizations, provided the organization uses the money to run its affairs. Additionally, gifts made to qualifying charities are tax deductible.

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