Paying the Gift Tax

• When you receive a large gift, you never have to worry about paying taxes on it. The person who gives the gift is the one who actually has to pay taxes on the amount if the gift tax is applicable to the situation. When it comes to giving a gift, whether or not you have to pay taxes on it will depend on your history of giving gifts. The more gifts you have given, the more likely you are to have to pay taxes.
  
  

Exemption

• To understand how much you can give, you need to look at the annual gift tax exemption. As of 2010, you get an exemption on gifts up to $13,000 to a single person each year. This annual limit applies to an unlimited number of individuals. This means that you could give $13,000 to one hundred different people and you would not have to pay taxes on anything. If you are married, the exemption goes up to $26,000 per person.
  
  

Lifetime Gift Limits

• To determine if you have to pay a tax, you have to not only look at your annual contribution limit, but also at how much you have given over the course of your life. If you give more than $13,000 to one person in a year, the overage amount will go towards your lifetime limit, which is $1 million as of 2010. For example, if you give someone $50,000 in one year, you will go over the annual limit by $37,000.
  
  

Maximum Gift

• The maximum amount of money that you can give to someone without paying taxes will depend on your past history. If you have never given anyone more than $13,000 in a year, you could conceivably give up to $1 million to someone without having to pay any gift taxes. If you give more than that, you will have to pay taxes on the amount that is over $1 million. If you have already given money to someone in the past in excess of $13,000, you would only be able to give a smaller gift.