Gift Giving

Scarsdale accountant Paul Herman of Herman & Company CPA’s has all the answers to your personal finance questions!

If you give any one person gifts valued at more than $13,000, it is necessary to report the total gift to the Internal Revenue Service. You may even have to pay tax on the gift. The person who received your gift does not have to report the gift to the IRS or pay either gift or income tax on its value. Gift Giving Tips from Scarsdale AccountantYou make a gift when you give property, including money, or the use of or income from 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. Please contact our Westchester accounting firm to receive your free consultation and learn more!

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Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.