Federal gift tax

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Federal gift tax

A federal tax imposed on assets conveyed as gifts to individuals.

Gift Tax

A tax that the federal government levies on givers of gifts in excess of a certain value. If the value of a gift is over a certain amount, which varies from year to year but is always over $10,000, the government assesses the gift tax. The tax applies even if the recipient pays for the gift, so long as he/she does not pay for the full value. Generally speaking, payments for medical, educational, and political purposes are exempt from the gift tax, as are gifts to one's spouse.
References in periodicals archive ?
The Tax Court agreed with Pierre and held that the check-the-box regulations do not "apply to disregard the LLC in determining how a donor must be taxed under the Federal gift tax provisions on a transfer of an ownership interest in the LLC.
64) Thus, the minor differences between Alaska's DAPT statutes and South Dakota's initial DAPT statutes in their treatment of creditors with tort claims and creditors seeking child support and alimony could likely have been significant in either determining the federal gift tax consequences to a settlor's transfers to the trust or in determining the federal gross estate of a settlor for federal estate tax purposes.
With regard to lifetime transfers other than a direct skip, an allocation is made on the federal gift tax return.
In addition to these federal gift tax changes, there are numerous federal estate tax changes contingent upon when a taxpayer passes away.
Is the federal gift tax imposed on gifts to charitable organizations?
The tax implications also include state gift tax (only a few states have one) where applicable, which in many instances can be greater than the federal gift tax, because of the large credit and exemptions currently available under federal gift tax law.
Although such contributions are considered completed gifts for federal gift tax purposes, the annual exclusion of $10,000 per year per donee is more than sufficient to cover the annual maximum $500 contribution per donee (designated beneficiary).
Each year, a donor may give $10,000 ($20,000 if a spouse joins the gift) per donee with no federal gift tax consequences.
There is an exemption to the federal gift tax for direct payments of tuition.
Recall that one of the objectives of an ING trust is that the transfer to the ING trust be an incomplete gift for federal gift tax purposes.

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