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Gifting Limits for Taxes

Gifting Limits for Taxes thumbnail
Gifts of money or property under $13,000 are not subject to federal taxes.

The Internal Revenue Service states that the donor of a gift may be subject to federal gift taxes. The recipient of the gift, however, pays neither federal gift taxes nor federal income taxes on the gift.

  1. Annual Exclusion

    • As of 2009, gifts in the form of money, personal items or property will not be taxed if their combined values are under $13,000 for each recipient. The donor of the gift cannot deduct the value of the gift from his federal income tax.

    Estate Inheritances

    • A unified tax credit may help the donor of a gift reduce, or even eliminate, any federal gift tax that he must pay. As of 2009, if a donor wishes to leave her property to someone other than her spouse upon her death, she may leave an estate worth up to $3.5 million without having to pay any federal gift taxes.

    Gifts Exempt from Taxes

    • Many gifts are not taxable, regardless of the dollar amount of the gift. Gifts to a spouse, a charity or a political organization are exempt from tax. Monetary gifts used for school tuition or to pay medical bills are also not taxed.

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