The IRS answer, in plain English — for US holders.
A genuine gift is not income for the recipient and not a sale for the giver. The tax is deferred, not erased.
$19,000 per recipient a year with no Form 709. $38,000 for a couple splitting a gift. $15 million lifetime exemption.
Above $19,000 to one person, the giver files Form 709. The excess counts against the $15 million lifetime exemption — usually $0 tax due.
The recipient inherits the donor's cost and holding period. Bought for $800, gifted at $3,000, sold at $5,000: gain $4,200.
Bought $60,000, gifted at $40,000. Sell at $70,000: gain $10,000. Sell at $30,000: loss $10,000. Sell at $50,000: neither.
A gift keeps the donor's old basis. An inheritance steps the basis up to the value at death. That difference can be huge.
Worked examples, the records checklist, and the five mistakes to avoid — all in the free guide.
Read the Full Guide →