Are the Gifts I Make Under My Will Taxable Income To My Beneficiaries?
No. With respect to federal income tax, gifts are not income, and the giver gets no deduction for making the gift. For the receiver of a gift, no matter how large the gift, there is no tax and no IRS reporting requirement. For the giver of the gift, if a gift to a non-spouse receiver exceeds $13,000 in 2011 (this number has been being adjusted upward in $1,000 increments when warranted), then you need to do some estate tax planning and make a gift report to the IRS. Check with your certified public accountant for assistance in this regard.