What are the rules for gift tax?

What are the rules for gift tax?

The gift tax applies to transfers of money or property to another person without receiving something of equal value in return. In the U.S., you can give up to $15,000 per person per year without incurring gift tax.

What happens if I exceed that amount?

If you exceed the annual exclusion amount, you may need to file a gift tax return. However, you won't owe tax until your total gifts exceed the lifetime exemption, which is over $11 million.

Are there any exceptions to the gift tax rules?

Yes, there are exceptions. For example, gifts to your spouse, payments for someone's medical expenses, and educational expenses are generally exempt from gift tax.

How do I report a gift for tax purposes?

To report a gift, you need to file IRS Form 709, the United States Gift (and Generation-Skipping Transfer) Tax Return, if your gifts exceed the annual exclusion.