How do U.S. Gift Taxes Work? IRS Form 709 Example

Have you heard that the U.S. federal government taxes gifts? Believe it or not, you might have to report gifts on a federal tax return if the fair value exceeds certain amounts during the year.

Generally, the donor is required to file all gift tax returns and pay any potential gift taxes. The recipient of the cash or property is not responsible for any gift taxes unless certain exceptions apply (e.g., gifts from non-U.S. persons).

U.S. individuals are allowed an annual gift exclusion of up to $15,000 for the 2020 and 2021 tax years. Any gifts over this amount must be reported.

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DISCLAIMER: I am a licensed attorney and certified public accountant (CPA) in the State of Florida. I am not a financial advisor. The information provided in this video is for entertainment purposes only. No such communication is provided in the course of an attorney-client relationship, and no communication is intended to constitute legal advice. You should speak with your own tax and legal professionals to discuss your circumstances before performing any of the tax, legal or accounting strategies demonstrated in this video. Thank you.