• When giving a gift to someone, according to the IRS, a tax is implemented if a specified value is exceeded. The person making the gift typically pays this tax. The limit varies based on whether the gift is being made by an individual or a couple. There are also certain types of gifts that are not subject to the gift tax, such as paying for the education or the medical expenses of a family member.
  
  

IRS Definition of a Gift

• For a donation to someone to be considered to be a gift, it must meet certain criteria according to the Internal Revenue Service (IRS) of the United States. A gift is an item of value presented to someone directly or through a third party, and the individual giving the item does not receive the full value of that gift according to the current fair value.
  
  

Property Valuation

• If property is given as a gift, it is valued based on the current market value. The IRS uses the current appraisal by an appraiser for that property based on the current market conditions. If the property increases in value, the value of the gift is not changed since it was determined at the time of the gift.
  
  

Investments That May Be Gifted

• There are several different types of investments you may give that are not subject to gift tax until you exceed your annual and lifetime gift tax limits. The savings account is one of them, because it earns interest on an annual basis. Some other investments include savings bonds, stocks, and mutual funds. All of these are valued at their current fair market value at the time you give them as a gift, not at their future value, according to AXA Equitable.
  
  

Annual Limits

• The IRS indicates that the most an individual may give to one other individual is $13,000 per year before the gift tax may apply. If a couple presents a gift, that limit is $26,000. Individuals or couples may present as many gifts as they wish to different individuals as long as they remain below those thresholds, and not owe any gift tax, according to the IRS. Gifts given from one member of a couple to the other member are not subject to the IRS gift tax.
  
  

Unified Tax Credt

• The unified tax credit is a combination of the gift and estate tax credits. According to Invest-FAQ.com, as of 2009, this meant that an individual could give over $1 million in gifts to others during his lifetime before being subject to the gift tax. The website also states that during 2010, the transfer of an estate after an individual's death can be made with no taxes. Invest-FAQ.com indicates that if the value of the estate is over $1 million as of 2011, the value above $1 million is subject to the estate tax. The estate tax is not the same as the gift tax, but it is related to it as part of the unified tax credit when gifting is involved, according to the website.