With only days left before Christmas and the New Year, many
holiday shoppers may be wondering besides sales tax or GST / HST,
what other possible taxes could apply to their holiday
celebrations? In this short post, we will address some of your
questions as to how the US Internal Revenue Service
("IRS") and the Canada Revenue Agency ("CRA")
may ruin your holiday parties.
Gifts for US Persons
Individual Gifts
If you're a US person, each gift you give has a cash value
that depletes an annual exclusion amount. For each person to whom
you give a gift, you have an annual limit on the value of gifts you
can make before the gift itself becomes taxable. For gifts with a
tax basis, generally the recipient of the gift also receives the
gift giver's cost basis.
