A gift is the transfer of property from one person to another without getting back something of equal value. Most people know that you can gift up to $10,000 each year to a single individual without paying the gift tax.  What many people fail to realize is that the amount you can gift includes ALL gifts given an individual in one calendar year. So let us say Mom is "gifting", giving, $10,000 a year to you to reduce the amount of her estate subject to estate taxes. Now let us also say that Mom sends you a birthday card, worth $3.00, and takes you to dinner twice, for another $50. Mom owes gift tax on the $53.00. If no gift tax return is filed, the entire $10,053 will be added back to her estate on her estate tax return. A good estate planning attorney would have advised Mom to only give $9,000-$9,500 a year in cash, giving her plenty of cushion to give presents for birthdays and the holidays too.