If you gave someone money or property, you may owe taxes on the gift. Here are some tips to help you determine if your gift is taxable:
Nontaxable Gifts. While the default assumption is that gifts are taxable, the following are nontaxable gifts:
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• Gifts that do not exceed the annual exclusion for the calendar year ($15,000 in 2019)
• Tuition or medical expenses you paid directly to a medical or educational institution for someone
• Gifts to your spouse
• Gifts to a political organization for qualified uses
• Gifts to qualifying charities
Annual Exclusion. For 2019, the annual exclusion is $15,000. Gifts under that amount are not subject to the gift tax, even if they don’t fall into one of the categories above. If you give a gift to someone else, the gift tax usually does not apply until the value of the gift exceeds the annual exclusion for the year.
For more information on gifts and taxes, speak to a qualified tax professional.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov[8]
[8] www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes
