Gift Tax Return

The IRS sets a limit to the value of gifts received throughout the year. If you received a gift that exceeds that limit, you have to fill out a gift tax return. In the Trump era, the gift tax exemption is $15,000; any amount gifted above that limit is subject to (usually) ordinary income taxes.

Say your great grandfather gifted you $20,000 this year. Well, he would have to file a gift tax return when filing his annual tax forms, and then potentially pay a tax on that gift out of his denture fund. For a stock or bond to be considered a gift, the receiver cannot give the giver anything in return. The receiver of the gift may pay the tax on behalf of the giver if the giver has exceeded their gift tax deduction limit.