In a legal sense, the term “gift” refers to a definite, voluntary transfer of property from to another. The transfer must be made without any consideration (that is, without an expectation of receiving compensation in return). A person or party who makes a gift is called a “donor”, while the one receiving the gift is called the “donee”.
Transfers that qualify as a gift are a usually exempt from various tax laws. Gifts can usually be made to persons or to qualified entities like a registered charity. Generally speaking, there are three types of ways that a gift can be transferred:
Not all transfers of property qualify as a gift. The term “gift” has legal significance and only transfers that meet all the elements of proof will be classified as a gift. Though laws may vary by region, in general the elements of proof for a gift are:
Thus, transfers that don’t satisfy these requirements won’t be classified as a gift. For example, the “donor” might not have intended to make the transfer a gift if they had asked for payment in return. As such, the donor might not be allowed to claim tax exemptions that cover gifts.
Basically any form of property can be transferred as a gift, as well as various types of assets. These include:
As a final note, services are generally not considered to be property, and therefore can’t be the subject of a gift transfer.
Transferring a gift can sometimes be a very formal undertaking, especially for property that is worth large amounts. If you need assistance with a gift, or have any questions, you may wish to contact a lawyer in your area. Also, disputes can sometimes arise over gifts, so it might be necessary to hire a lawyer if you need to file a lawsuit.
Last Modified: 02-13-2012 03:40 PM PSTLaw Library Disclaimer
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