{"id":353944,"date":"2019-11-05T10:09:08","date_gmt":"2019-11-05T15:09:08","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/tax\/federal-taxes\/do-i-have-to-pay-taxes-on-a-gift.html"},"modified":"2026-02-24T11:09:55","modified_gmt":"2026-02-24T16:09:55","slug":"do-i-have-to-pay-taxes-on-a-gift","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/tax\/federal-taxes\/do-i-have-to-pay-taxes-on-a-gift.html","title":{"rendered":"Navigating Gift and Estate Tax Audits"},"content":{"rendered":"\n
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Navigating Gift and Estate Tax Audits<\/h1>\n\n
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\n By Susan Buckner, J.D.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last updated\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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Key Takeaways<\/h2>\n

Taxpayers<\/span> can avoid gift and estate <\/span>tax<\/span> audits<\/span> by properly reporting any gifts that exceed the annual exclusion limits or lifetime exemptions<\/span>. Gifts must also be reported at fair market value<\/span>. During an audit, a taxpayer<\/span> may need to show property appraisals<\/span> or Form 709<\/span> filings.<\/p>\n\n <\/div>\n <\/div>\n<\/div>\n\n\n

Gifting money, real property, or other valuable personal property to friends or family members seems like a good idea and a great way to avoid income tax<\/span> issues. For tax purposes<\/span>, gifts are not taxed, at least at first, and gift-givers only pay taxes on very large gifts. However, as with anything involving taxes, it\u2019s not quite that cut-and-dried.<\/p>\n

If the gift is not reported by the gift-giver, the property value exceeds the annual exclusion amount<\/span>, or the item given was not a \u201cgift\u201d under IRS<\/span> guidelines, then the recipient may wind up paying taxes on the gift after all. This article explains the gift pitfalls you need to avoid to stay on the good side of the IRS<\/span>.<\/p>\n

The High Cost of Free Money (and Other Gifts)<\/strong><\/h2>\n

What is a gift? According to the IRS<\/span>, a \u201cgift\u201d has an objective legal definition. It doesn\u2019t matter what the giver\u2019s intention was. A gift exists when:<\/p>\n