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Taxation of Gifts

Are gifts subject to an income tax? Why or why not? What constitutes a gift?

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Gifts are not subject to income tax. IRC Section 61 states that "Except as otherwise provided in this subtitle, gross income means all income from whatever source derived." Merriam-Webster Online defines income as "a gain or recurrent benefit usually measured in money that derives ...

Solution Summary

This solution discusses what a gift is, whether it is subject to income tax, and why or why not.