Posted by fcarva1054 4 years ago In:

tax question

Gift tax

Does the person receiving a gift under 12,000 have to report it on their taxes? Annual exclusion. In 2007, you generally can give up to $12,000 each to any number of people in 2007 and none of the gifts will be taxable. My question does it have to be reported by the person receiving and how??

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Answers

MIKKA Answered:

Gifts you receive aren't considered income. It doesn't matter how large they are. You don't report them on your income tax return in any way.

There are a couple of important qualifications on this simple rule:

True gifts. This rule applies only to true gifts. You can't avoid paying income tax by calling something a gift when it isn't. For example, a "gift" you receive in exchange for services or some other consideration isn't a gift.
Income after gift. If you receive a gift of property that produces income, you must report any income produced after the gift. For example, if you receive stock as a gift, you must report any dividends paid on that stock after the gift.