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Tax Glossary: Gift Tax

Posted by McDonald & Osborne Posted on Oct 13 2015

Gift Tax : To prevent people from avoiding the estate tax by giving their property away, the law includes a gift tax, too. You may give up to $13,000 yearly to as many people you want without worrying about this tax. Larger gifts are taxable, but a tax credit offsets the tax on the first $5 million of lifetime taxable gifts. Any part of the credit used to protect taxable gifts will not be available to reduce estate taxes. When the gift tax is owed, it is owed by the giver, not the recipient.