2008 Gifts

The system of Federai transfer taxes comprises three interrelated parts: the estate tax, the gift tax, and the generation-skipping transfer tax. The estate tax is a type of indirect tax imposed on the right to transfer gifts at death; the gift tax is levied on gifts transferred during a donor's life, also known as inter vivos gifts. Background Congress added the gift tax to the United States transfer tax system in 1924.2 The gift tax rates were equal to estate tax rates, and there were provisions for both an annual exclusion and a lifetime exemption.