How to Declare a Gift of Money With the IRS

Some gifts are exempt from declaration.

When you make a cash gift to an individual or organisation, you are required by law, in most situations, to declare this gift to the IRS. The purpose of this declaration is to allow the IRS to monitor your lifetime gifting taxation limit -- which is set at $1 million as of publication. Declare your applicable gifts to the IRS using form 709.

Instructions

1. Determine whether or not you are required to declare the gift. You can give away up to $13,000 per year in gifts without declaring it to the IRS. Also, gifts to medical, educational and political organizations are exempt.

2. Complete IRS form 709. Complete lines 1 to 18 of the form and list each gift in part 1, 2 or 3 of schedule A.

3. Sign the form and return it to the IRS. You must submit the form 709 on an annual basis so a gift made in 2011, for example, must be submitted on your 2011 form.

References

• "Tax Laws Made Simple‎"; Michael E. Parker; 2010
• IRS: Instructions for Form 709