actually as long as the gift is 11k or under from one source or 22K or under from a joint spouse gifting to said recipient then it is not taxable to the recipient nor does it deduct from the lifetime bulk giving allowance of the gifter.
You may give 11k to an infinite number of DIFFERENT people per year if you like and none of them will pay any tax on said gift.
and it does not come off your lifetime credit allowance for estate purposes....which is around 1.5 million this year and the death tax on excess estate is now about 47%
It all phases out in 2010....a good year to die if you like your heirs...lol
but then comes back the next year.
I look for W to make this permanent.
My bad regarding the gift tax. You guys were right about it being tax free to the one receiving it.