The Billups Company CPA's, Inc.

Following the rule that no good deed should go unpunished, gifts are generally taxable or at least reportable on a gift tax return. The big exception is the annual gift tax exclusion.

People making gifts may exclude up to $13,000 for each donee for present interest gifts made in 2010. A married couple may each make a separate $13,000 gift to a single donee, ($26,000 total), without being subject to the gift tax. If they make a combined $26,000 gift they would be required to file a gift tax return, but may elect to split the gift in order to avoid the tax.

An example of this would be the parents of a bride who want to shower cash on the newly married couple to help them buy a house. Each of the parents could separately give each of the newlyweds a gift of $13,000 for a total of $52,000. All of the gifts are excluded from gift taxes and no gift tax return is required.