Gift

AAA

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.

INVESTOPEDIA EXPLAINS '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 Letter

    Written correspondence to a lender stating that money received ...
  2. Qualified Personal Residence Trust ...

    A specific type of trust that allows its creator to remove a ...
  3. Form 8283

    A tax form distributed by the Internal Revenue Service (IRS) ...
  4. Cy Pres Doctrine

    Cy Pres represents a legal concept that gives courts the power ...
  5. Gift Causa Mortis

    A gift to be given at a later date in anticipation of the giver's ...
  6. Estate Tax

    A tax levied on an heir's inherited portion of an estate if the ...
RELATED FAQS
  1. Can I donate stock to charity?

    Giving stock, instead of cash, as a donation can greatly benefit both parties. You will find that most charities, hospitals, ... Read Full Answer >>
  2. My 80-year-old mother used her Roth IRA assets to make an $11,000 annual gift tax ...

    Under the current version of the law, any IRA or Roth IRA assets that are gifted while the IRA owner is alive are considered ... Read Full Answer >>
  3. 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 Full Answer >>
Related Articles
  1. Taxes

    Cut Your Tax Bill With Donor-Advised Funds

    Beat the tax man come April 15 by investing in a charity-friendly fund.
  2. Retirement

    Gifting Your Retirement Assets To Charity

    There are several things to consider when it comes to this type of charitable giving. Make sure you're well informed.
  3. Retirement

    In-Depth Guide To Estate Planning

    The process of planning your estate takes careful consideration. Skip any of these important steps, and your estate could be mishandled.
  4. Retirement

    Skipping-Out on Probate Costs

    Don't let bad estate planning lead to unnecessary costs and stress for your inheritors.
  5. Professionals

    Tips for Spreading the Wealth to Relatives

    There are many ways that your clients can move money or other assets to relatives in order to reduce their tax bills. Here's a primer on best practices.
  6. Professionals

    Tips for Handling Client Inheritance

    When clients leave or receive an inheritance, be prepared to deal with much more than mere paperwork or financial transactions.
  7. Professionals

    Advice on Dealing with Unequal Inheritances

    When it comes to inheritances, the concept of equal versus equitable can be hard to navigate, even when all parties are reasonable.
  8. Professionals

    Top Tips for Family Wealth Transfers

    Essential tips for tackling family wealth transfers.
  9. Professionals

    Estate Planning Tips for Financial Advisors

    Estate planning is not a set-it-and-forget-it proposition. Here are some tips for you and your clients.
  10. Personal Finance

    What's an Irrevocable Trust?

    In an irrevocable trust, the grantor gives up the right to revise, amend or terminate the trust without the permission of the beneficiary. An irrevocable trust is best used as an estate-planning ...

You May Also Like

Hot Definitions
  1. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  2. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  3. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  4. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  5. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  6. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
Trading Center