Introduction If you give someone money or property during your life, you may besubject to federal gift tax. The money and property you own when youdie (your estate) may be subject to federal estate tax. The purpose ofthis publication is to give you a general understanding of when thesetaxes apply and when they do not. It explains how much money orproperty you can give away during your lifetime or leave to your heirsat your death before any tax will be owed. No tax owed.Most gifts are not subject to the gift tax and most estates are notsubject to the estate tax. For example, there is usually no tax if youmake a gift to your spouse or if your estate goes to your spouse atyour death. If you make a gift to someone else, the gift tax does notapply to the first $10,000 you give that person each year. Even if tax applies to your gifts or your estate, it may beeliminated by the unified credit, discussed later. No return needed.Generally, you do not need to file a gift tax return unless yougive someone, other than your spouse, money or property worth morethan $10,000 during a year. An estate tax return generally will not beneeded unless the estate is worth more than the applicable exclusionamount for the year of death. This amount is shown in the table underUnified Credit. No tax on the person receiving your gift or estate.The person who receives your gift or your estate will not have topay any gift tax or estate tax because of it. Also, that person willnot have to pay income tax on the value of the gift or inheritancereceived. No income tax deduction.Making a gift or leaving your estate to your heirs does notordinarily affect your federal income tax. You cannot deduct the valueof gifts you make (other than gifts that are deductible charitablecontributions). What this publication contains.If you are not sure whether the gift tax or the estate tax appliesto your situation, the rest of this publication may help you. Itexplains in general terms: When tax is not owed because of the unified credit, When the gift tax does and does not apply, When the estate tax does and does not apply, and When to file a return for the gift tax or the estatetax. This publication does not contain any information about state orlocal taxes. That information should be available from your localtaxing authority. Where to find out more.luxury hotels in WindermereThis publication does not contain all the rules and exceptions forfederal estate and gift taxes. It does not contain the rules thatapply to nonresident aliens. If you need more information, see thefollowing forms and their instructions: Form 706, United States Estate (andGeneration-Skipping Transfer) Tax Return, Form 709, United States Gift (andGeneration-Skipping Transfer) Tax Return, and Form 709-A, United States Short Form Gift TaxReturn. To order these forms, call 1-800-TAX-FORM(1-800-829-3676). If you have access to TTY/TDDequipment, you can call 1-800-829-4059. To get theseforms with your personal computer or by fax, see the first page ofthis publication.