You usually do not pay income tax on gifts you receive
Money or property given to you as a gift is not counted as your income, so you do not owe federal income tax on it. The person who gives the gift may have tax obligations depending on the size of the gift, but that is their responsibility, not yours. You can receive gifts of any amount without reporting them on your tax return or paying tax on what you receive.
This rule applies whether the gift is cash, a car, real estate, stocks, or anything else of value. Once you own the gift, any income it produces afterward — such as interest on a savings account or rent from a property — is taxable to you. But the original gift itself is not.
Key Takeaways
- You do not pay income tax on gifts you receive, regardless of the amount.
- The giver may owe gift tax if the gift exceeds $18,000 per person per year (2024), but this does not affect your taxes.
- Gifts from employers, contests, or prizes are treated differently and may be taxable to you.
- Income produced by a gift after you receive it — such as interest or dividends — is taxable to you.
- You do not need to report personal gifts on your federal tax return.
When the giver may owe gift tax
The federal gift tax applies to the person giving the gift, not the person receiving it. In 2024, a person can give up to $18,000 per person per year without triggering gift tax. If someone gives you $25,000, they may owe tax on the $7,000 over the limit — but you do not.
The giver can also give larger amounts without owing tax if they have not used up their lifetime exemption, which is $13.61 million in 2024. Most people never reach this limit. If the giver does exceed it, they file a gift tax return (Form 709) to report it, but again, you have no tax obligation on your end.
These limits and exemptions change yearly and can vary based on changes in federal law. If you are receiving a very large gift and want to understand the giver's situation, they should speak with a tax professional, but your own tax filing is unaffected.
Gifts from employers and contests are taxable to you
Not all gifts are treated the same way. Money or prizes you receive from an employer, a contest, a lottery, or a game show are considered income to you and must be reported on your tax return. These are not personal gifts — they are compensation or winnings.
If your employer gives you a cash bonus or a gift card worth more than $25, it is taxable income. Small gifts like a holiday gift basket under $25 may be excluded, but your employer should tell you if a gift is taxable. Contest winnings and lottery prizes are always taxable, and the organization running the contest usually issues you a Form 1099-MISC or similar document reporting the value.
Inherited money and gifts from family
Money you inherit from a will or estate is not income tax to you, similar to a gift. The estate itself may owe estate tax if it is large enough, but that is handled before you receive your inheritance. You do not report inherited money on your income tax return.
Gifts from family members — parents, grandparents, siblings, or relatives — follow the same rule as any personal gift. You do not owe tax on the amount you receive. If the gift is very large and the giver is concerned about their own tax situation, they should consult a tax professional, but your tax return is not affected.
Income produced by a gift is taxable
Once you own a gift, any money it generates is taxable income to you. If someone gives you $10,000 in cash and you deposit it in a savings account, the interest you earn is taxable. If you receive stock as a gift and it pays dividends, those dividends are taxable income. If you receive a rental property as a gift and collect rent, that rent is taxable.
You report this income on your tax return in the year you receive it. The original gift is not taxable, but the earnings from the gift are. Keep records of any income your gifts produce so you can report it accurately.
What to do if you are unsure whether something is a gift
The key question is whether the money was given to you with no expectation of repayment or service in return. A personal gift from a friend or family member with no strings attached is not taxable. A loan, even from family, is not a gift and is not taxable income — but you may owe tax on interest if the loan charges interest.
If you received money and are not sure whether it counts as a gift or income, write down the circumstances: who gave it to you, why they gave it, and whether they expect anything in return. If you are still uncertain, a tax professional can help you determine the correct treatment. You do not need to report personal gifts on your federal return, but if the IRS ever questions the source of money in your account, having a clear record helps.
Frequently Asked Questions
Do I have to report a gift on my tax return?
No. Personal gifts are not reported on your federal income tax return. You only report gifts if they are from an employer, a contest, or another source that makes them taxable income rather than a personal gift.
What if someone gives me $50,000?
You do not owe tax on it. The giver may owe gift tax if they have exceeded their annual limit of $18,000 per person, but that is their responsibility. You report nothing on your return.
Is money from a GoFundMe or crowdfunding campaign taxable?
It depends on the purpose. Money raised for a specific hardship — medical bills, disaster relief, or funeral expenses — is usually not taxable. Money raised as payment for goods or services, or as a business loan, may be taxable. If you organized a fundraiser, ask the platform or a tax professional about your situation.
Do I owe tax on a gift of stock or cryptocurrency?
You do not owe tax when you receive the gift. However, when you later sell the stock or cryptocurrency, you owe capital gains tax on any increase in value since the giver acquired it. Keep records of what the gift was worth when you received it.
What if my parents give me money to pay for college?
Money your parents give you is a gift and is not taxable to you. However, if you use it to pay tuition, you may be able to claim education tax credits on your return. Talk to a tax professional about which credits you might use.