The government wants a piece of any large gift. Anything over the annual exclusion amount will be taxed to the receiver during your life, and anything handed down at death will be taxed to the
estate.
The IRS will credit you back that tax up to a certain amount, but the large gifts in life and after death are added together to count toward that credit. To learn more about this "Unified Credit" and how it could affect you, read my article at
http://www.legalees.com/unified-taxes.
