The gift tax is a tax of the transfer of a gift imposed on the donor. A gift is complete when the donor has so parted with dominion and control as to leave him or her no power to change its disposition. The amount of a gift made in property is the fair market value of the property at the date of the gift.
The first $15,000 of gifts of present interest to each donee is excluded from taxable gift amounts. Gifts of future interests in property, such as the remainder interest, do not qualify for the annual exclusion, nor are such gifts a deduction for gift tax.
Gift Splitting
For married couples, each spouse may treat each gift made to any third person as made one-half by the donor and one-half by the donor’s spouse. Each spouse may exclude $15,000 (for 2019) annually of gifts to each donee for a combined gift of $30,000. Gift splitting is not available to a couple if they legally divorce after the gift and one of the spouses remarries before the end of the calendar year.
Medical or Tuition Costs Deduction
Amounts paid directly to the third party on behalf of another individual for (1) medical care costs or (2) tuition costs are excluded from taxable gifts.
Marital deduction
Gifts between married spouses are deductible in full (after applying the annual exclusion)
Charitable deduction
FMV of gifts to a qualified charitable organization is deductible in full (after applying the annual exclusion)
A gift tax return is due on the 15th day of April following the calendar year in which a gift was made. This is due without regard to the donor’s income tax year. A gift tax return for a year of death is due not later than the estate tax return due date.
