DEFINITION of 'Gift'

Property, money or assets that one person transfers to another while receiving nothing or less than fair market value in return. Under certain circumstances, the IRS collects a tax on gifts. Transfers of money or property that are given freely or exchanged for less than market value may be subject to the gift tax if the donor has exceeded the annual or lifetime gift exemption.

BREAKING DOWN 'Gift'

If you receive a gift, you aren't required to report it as income; it is the gift giver who is responsible for paying any tax and filing a gift tax return. Gifts of any amount to spouses or political organizations, and payments of tuition and medical expenses on behalf of others, are generally not taxable as gifts. Estate planning can help wealthy individuals avoid paying gift taxes.

RELATED TERMS
  1. Gift Tax

    A federal tax applied to an individual giving anything of value ...
  2. Gift Tax Return

    A federal tax form that must be filled out by any individual ...
  3. Gift In Trust

    An indirect bequest of assets to a beneficiary by means of a ...
  4. Gift Splitting

    A taxation rule that allows a married couple to split a gift's ...
  5. Annual Exclusion

    The amount of money that may be transferred by gift from one ...
  6. Gift Of Equity

    The sale of a home made to a family member or someone with whom ...
Related Articles
  1. Financial Advisor

    How to Gift Your Way to Lower Estate Taxes

    Estate planning is not just for inheritance. High net-worth individuals, who plan properly, can gift their money and save on taxes.
  2. Personal Finance

    How to Talk to Your Family About Christmas Gift Budgets

    Talking Christmas gift budgets with family members can be hard, but having the talk will help you stay on track financially.
  3. Personal Finance

    Top Websites For Discounted Gift Cards

    Gift cards can cost less when you buy them through a discount website. Just do the math before you cough up the cash.
  4. Investing

    How Safe Are Discounted Gift Card Websites?

    Could you buy a gift card online and find out it's worthless? Here's how to protect yourself (and whether you need to).
  5. Taxes

    10 Sources Of Nontaxable Income

    Taxes are often a deterrent from investing and saving. These financial practices will bring you no tax grief.
  6. Financial Advisor

    Surprise! These Items are Taxable

    These are 10 surprising taxable items you need to be aware of if you don't want the IRS knocking on your door.
  7. Retirement

    Top 10 Retirement Gift Ideas for That Special Day

    The age-old traditional gold watch has not gone out of style, but it's only one of many appropriate gifts to give a retiring employee.
  8. Financial Advisor

    A Quick Guide to High-Net-Worth Estate Planning

    A quick estate planning guide for high-net-worth individuals to help minimize taxes and costs, protect assets and plan for care.
  9. Taxes

    7 Sources Of Nontaxable Income

    All income in the United States is taxable, unless a provision specifically excludes it. Here are seven of those exceptions.
  10. Financial Advisor

    Family Business Estate Tax Loophole Could Be Closed

    The Treasury department is aiming to close a loophole that would result in higher estate and gift taxes for some wealthy business owners.
RELATED FAQS
  1. Can I give stock as a gift?

    Stocks, bonds or any other securities can be transferred as gifts. Giving the gift of stock also has benefits for the giver. ... Read Answer >>
  2. Justin and Britney, multi-millionaires, want to make the maximum gift of cash to ...

    The correct answer is c. A donor of money and/or gifts may give up to $12,000 to as many different recipients as they desire ... Read Answer >>
Hot Definitions
  1. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  2. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  3. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  4. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  5. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  6. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
Trading Center