If you gave money or property to someone as a gift, you may owe federal gift tax. The IRS offers the following tips:
• Most gifts are not subject to the gift tax. For example, there is usually no tax if you make a gift to your spouse, a charity or political organization or pay tuition or medical expenses for someone directly to the institution. If you make a gift to someone else, the gift tax usually does not apply until the value exceeds the annual exclusion — $13,000 for 2011 and 2012, or $26,000 if made by you and your spouse.
• Generally, the person who receives your gift will not have to pay any federal gift tax or income tax on its value.
• You cannot deduct the value of gifts you make (other than deductible charitable contributions).
The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. The following gifts are not taxable gifts:
For more information: See Publication 950, available at irs.gov or 1- (800) 829-3676.