SOI Tax Stats - Gift Tax Study Metadata
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What is the Federal Gift Tax?
The gift tax, reported on Form 709, United States Gift (and Generation-Skipping Transfer) Tax Retuurn, is one part of the Federal transfer tax system, which is a mechanism for taxing the transfer of assets from one person to another. The gift tax is incurred for inter vivos transfers, which is to say, transfers of property during the donor's lifetime.
A gift is taxed based on the year in which the gift is transferred or completed. The Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001 gradually increased the lifetime exemption amounts for gift taxes to $1,000,000, with a maximum tax rate of 35 percent. While the other two components of the transfer tax system, the estate tax and generation-skipping transfer tax, will be repealed at the end of 2009 without further legislation, the gift tax will remain intact. The EGTRRA provisions will expire in 2011, and the gift tax exemption amounts and maximum tax rates will revert to 2001 tax law levels.
It is important to note that three types of transfers are not defined as “gifts” and, therefore, are not subject to the gift tax under the Internal Revenue Code (IRC). First, gifts to political organizations are not taxed when they meet the criteria of IRC section 527(e) (1). Second, gifts of tuition made to a qualifying educational institution on behalf of an individual are not taxable, as long as the payment is made directly to the educational institution. Finally, the gift tax does not apply to the amount of medical expenses on behalf of an individual, paid directly to the individual or to the medical institution that provided care.
This page provides additional information about data produced in SOI's Gift Tax Study. Please click on a link below to get started.
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Please visit Gift Tax Statistics for data tables and articles from the study.