Further explain the regulations related to gift and estate tax?
This is a very broad topic, so we will cover the basic concepts of gift and estate taxes. Gift taxes are paid by the person giving the gift, on gifts over a certain amount. In 2013, single taxpayers can exclude $14,000 in gifts, and a married couple can exclude $28,000. If I gift my sister $15,000 to use as a down payment on a home she wishes to purchase, I only need to pay gift taxes on $1,000. If I give my church - community center - other charitable place $20,000, I don't need to pay any gift taxes, as it is considered a charitable contribution and not a gift. There is some exclusion to the gift tax rules. Money gifted for tuition, medical expenses, money given to a spouse, ...
This solution explains the regulations related to gift and estate taxes. A comprehensive discussion is provided.