Gift

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 Return

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

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

    A taxation rule that allows a married couple to split a gift's ...
  4. Gift Of Equity

    The sale of a home made to a family member or someone with whom ...
  5. Crummey Trust

    An estate planning technique that can be employed to take advantage ...
  6. Gift Causa Mortis

    A gift to be given at a later date in anticipation of the giver's ...
Related Articles
  1. Taxes

    What Are Gift Taxes?

    If you're not sure what gift taxes are, read on and we'll explain.
  2. Your Clients

    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.
  3. Personal Finance

    3 Best And Worst Gift Cards For 2012

    Here are the gift cards that offer the best deals and those that aren't worth your money.
  4. Personal Finance

    Will Your Gift Card Gift Go Unused?

    An unbelievable amount of money gets wasted in the form of non-redemption: nearly $5 billion a year. These tips will ensure that your gift card gift doesn't go to waste.
  5. Taxes

    Estate Planning Law Changes You Need To Know

    When organizing your affairs, you'll need to be aware of tax rates and other regulations.
  6. Budgeting

    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.
  7. Bitcoin Tax Guide: Gifts And Tips

    So in addition to all of the other tax consequences for Bitcoin, there are actually tax consequences for giving it away?! In some rare cases, yes. As a result, it's helpful to differentiate ...
  8. Budgeting

    5 Holiday Gift Ideas For Women

    Jewelry, apparel and - surprise! - gift cards lead the way for this shopping season.
  9. Taxes

    6 Ways To Leave Less For Uncle Sam

    Both the fabulously wealthy and the millionaire next door need to plan for the estate tax boomerang.
  10. Savings

    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).
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 >>
  3. How can my husband inherit a house deed?

    My mother in law wants to know the best way to leave the deed to her house to her son (my husband). Should it be left in ... Read Answer >>
  4. What are the pros and cons of digital gift cards (e-gift cards)?

    Examine the pros and cons of gift cards. Learn about protection in case of loss, monitoring spending by teens and wasted ... Read Answer >>
  5. Can I purchase my dad’s home by paying off the mortgage and using a quit claim deed? ...

    My dad owes around $35,000 on his home and has early Alzheimer's. I want to pay off the mortgage with cash and transfer ... Read Answer >>
  6. Last year I got my parents’ house title transferred to my name. Do I have to file ...

    I haven’t filed taxes since 2003 when I was in the army because I haven’t worked since then... Read Answer >>
Hot Definitions
  1. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  2. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  3. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  4. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  5. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  6. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
Trading Center