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Finance Dictionary and Glossary of Investment Terms
gift tax
Definition 1.
A graduated tax assessed against a person who gives money or an asset to another person without receiving fair compensation. A significant amount of each gift is tax-free. There are no exclusion limits on gifts given to a spouse unless the spouse is not a U.S. citizen. The recipient of the gift does not report income except when the gift is a property or stock. The recipient still has to pay taxes if he or she makes a profit from the gift.
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Definition 2.
A federal tax to be paid if a person receives gifts exceeding a set dollar amount per year.
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Definition 3.
A tax assessed on the giver of a property or asset as a gift. A $10,000 federal gift tax exemption exists per recipient. See: Gift splitting.
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