Do taxes have to be paid by the recipient on large non-monetary gifts?

[Anonymous]

This is a question from my boy. I Googled gift taxes but I'll be damned if I can make sense of it.

If someone, not a relative, gives you, say, a very valuable diamond worth $1,000,000, do you have to pay taxes on the value?

[Anonymous]

Of course

[Anonymous]

No can tell if you are a dog, or a lawyer, on the internet.

A true gift is not subject to income tax on the recipient. It would affect the giver's lifetime gift/estate tax exclusion but that generally does not have any effect on the recipient. Of course, there are very few, if any, times an unrelated person will simply give you a very valuable diamond. If the diamond is compensation of some kind for something you did (or didn't) do, then it would be income to the recipient.

[Anonymous]

No. The recipient of a gift does not pay taxes. The person giving the gift pays gift taxes unless the value is below the annual exclusion ($14000 in 2013 or $28000 for couples). Donors can also use their lifetime exclusion for larger gifts, currently 5.12 million dollars.

[Anonymous]

No, the giver files a form to claim it. Taxes aren't necessarily due.

[Anonymous]

Taxes are only due if they sell it

[Anonymous]

Taxes are payable by the giver.

[Anonymous]

Anonymous wrote:No. The recipient of a gift does not pay taxes. The person giving the gift pays gift taxes unless the value is below the annual exclusion ($14000 in 2013 or $28000 for couples). Donors can also use their lifetime exclusion for larger gifts, currently 5.12 million dollars.

+1

[Anonymous]

Anonymous wrote:Taxes are only due if they sell it

OP was asking about the gift tax, which is completely separate from the income tax (and the capital gains tax).

[Anonymous]

If someone gives you a diamond you don't pay taxes on it unless you sold it to someone else and would take the value on the gifted date as the immediate gain.