Can You Deduct Money Given as a Gift to an Individual?

Excessive financial gifts are viewed as income by the IRS.
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You can't deduct money that you give someone as a gift. The only donation deductions you can claim are charitable contributions to an IRS-recognized 501(c)(3) nonprofit organization. In fact, depending on the amount, you may owe taxes on money you give another individual as a gift. This obligation is known as the "gift tax."

Gift Tax Basics

Small gifts you give to friends or family usually don't create a tax implication. However, giving a financial gift over the annual limit to another individual for which you receive nothing of value in return causes a tax burden. As of 2013, the annual limit for an individual gift was $14,000. Thus, if you gave someone $20,000, you would be subject to a gift tax on the $6,000 difference. Alternatively, you can work with your tax professional and arrange for the recipient to pay the tax.

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