Gift tax

A federal tax on a monetary gift to a relative or friend. Generally, each person may give up to 510,000 per year to each donee without imposition of a federal gift tax. On higher gifts. there may be a gift tax, or the gift may affect the donor's estate tax. Example: Mr. and Mrs. Abel together give $20,000 this year to each of 3 sons ($60,000 total). There will be no gift tax imposed.