Nothing. In fact, it is a wonderful experience. However, when one gives a value in excess of the Annual Gift Exclusion per donee, the amount in excess is deducted from the unified credit and reduces the Life Time Estate Tax Exemption. Furthermore, the gift carries the donor's basis for Capital Gains purposes, as opposed to the stepped-up basis one receives on property passing as a result of death. Therefore, it is recommended that any gift be limited to the Annual Gift Tax Exclusion per donee and usually be in cash.
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