As of 2015, tax laws stipulate that the annual exclusion for gifts of money is $14,000 per person, per calendar year, according to the Internal Revenue Service. When gifting money, the donor is typically responsible for paying the gift tax. Gift tax is calculated using the face value of the gift less the exclusion and lifetime exemption amounts, then multiplied by the gift tax rate, notes About.com.Continue Reading
A direct or indirect transfer of gifts or money, measured in money that does not go back to the donor, is considered a gift, states the IRS. The $14,000 exclusion is per person, which means a person can gift up to $14,000 per year to any number of people. As of 2015, the couples exclusion is $28,000 per year, per person. Most gifts are considered taxable, but medical expenses or tuition paid for another individual is not considered taxable by the IRS. The IRS does not consider gifts to a political organization or spouse as taxable, and money given to charity is a deductible expense and is exempt from gift tax.
If someone leaves money or an estate to a beneficiary, gift taxes are still due, explains the IRS. The value of gifts donated to qualified charitable organizations are exempt from taxes when a person prepares his income tax return.Learn more about Taxes