This article is from the US Taxes FAQ, by Wayne Ross email@example.com.
A gift for tax purposes means the transfer of property
without adequate and full consideration. If you received 'some
item' in exchange for your car or your services to 'some person',
it wasn't a gift.
For simplicity let's assume you received shares of stock
from your mother on your birthday. First, your mother must
determine the value of the stock on the date of gift. If the value
is $10,000 or less there is no gift tax, because there is an annual
exclusion of $10,000 per donee (recipient). Keep in mind, that if
your mother also gave you $5,000 in cash then the total gifts
within the year exceeds the $10,000 exclusion.
If the value of the gift(s) exceed $10,000 there still
may be no gift tax, if your father and mother elect so-called
"gift-splitting". In gift-splitting one-half of the gift(s) is
deemed to be given by each spouse.
If the value of the gift(s) is more than $10,000 a gift
tax return must be filed by the donor (giver) by April 15th of the
year following the year of the gift, and a gift tax may be payable
by the donor, NOT the donee. Note: A short Form 709 is required for
split gifts over $10,000 even if no tax is due.
Estate and gift taxes are unified excise taxes on the
transfer of property, and there is a $600,000 lifetime credit per
transferor for the total of both, which could reduce any gift tax
due. We are getting into deeper water now, and you should consult
a professional for further information.