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Do I have to pay gift tax on a gift to help pay for a house?

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Wiki User
2007-12-23 18:30:05

Under the U.S. Internal Revenue Code, gift tax is not counted on

the first $11,000 per person per year (more or less, depending upon

which year the gift was made).

== == The tax is paid as a gift tax by the givor. (Although it

has to be a gift , and some things like gifts by an employer to an

employee are actually always considered payroll.)

If you gave any one person gifts in 2006 that valued at more

than $12,000, you must report the total gifts to the Internal

Revenue Service and may have to pay tax on the gifts. The person

who receives your gift does not have to report the gift to the IRS

or pay gift or income tax on its value. Gifts include money and

property, including the use of property without expecting to

receive something of equal value in return. If you sell something

at less than its value or make an interest-free or reduced-interest

loan, you may be making a gift. There are some exceptions to the

tax rules on gifts. The following gifts do not count against the

annual limit: * Tuition or Medical Expenses that you pay directly

to an educational or medical institution for someone's benefit *

Gifts to your Spouse * Gifts to a Political Organization for its

use * Gifts to Charities If you are married, both you and your

spouse can give separate gifts of up to the annual limit to the

same person without making a taxable gift. Now importantly in

family situations...there may be a credit or exclusion available if

there is ever an estate tax situation.

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