Gifts Excluded From Gift Tax

Gifts Excluded from Gift Tax

1. Gifts, excluding gifts of future interests, that are not more than the annual gift exclusion for the calendar year,

     i.    Annual Exclusion for 2011 equal gifts that exceed $13,000 per person.   There is no limit on number of people donor can make gifts that are less than the annual exclusion.

2.     A separate annual exclusion applies to each person to whom you make a gift.

3.     The gift tax annual exclusion is subject to cost-of-living increases.

Gifts that do not qualify for annual exclusions.

         1.     A gift of a future interest is a gift that is limited so that its use, possession, or enjoyment will begin at some point in the future.

        2.     Gift tax exclusion not available for gifts to non- US citizen spouses.

Other Gifts Not Subject to Gift Tax

1. Tuition or medical expense..Donor required to pay directly a medical or educational institution for a third person..The danger is the donor reimbursed a family member for medical expense which does not exclude the value of the gift.,        

2. Gifts to your spouse [if a U.S.citizen]

3. Gifts to a political organization for its use, and

4. Gifts to charities