When do recurring family gifts require a gift-tax return?

Start by totaling the donor's gifts to that recipient for the year and comparing the total with the current annual exclusion.

If the donor gives more than the annual exclusion to one recipient, a gift-tax return may be required even when no current gift tax is due. The excess may reduce the donor's lifetime exclusion instead.

Original example:

• Darren Lee gives his sister 1,800 every month for rent support.
• He makes no direct tuition or medical-provider payments.
• The year's total exceeds the applicable annual exclusion.

The likely issue is donor-side gift-tax reporting. Darren's sister generally does not report a true gift as income, but Darren may need to file a gift-tax return to report the excess gift.