You make a gift when you give property, including money, or the use or income from property, without expecting to receive something of equal value in return. If you sell something at less than its value or make an interest-free or reduced-interest loan, you may be making a gift.

There are some exceptions to the tax rules on gifts. You can make the following gifts of more than $10,000 and not have to pay gift tax:

• Tuition or medical expenses that you pay directly to an educational or

medical institution for someone's benefit;

• Gifts to your spouse;

• Gifts to a political organization for its use; and

• Gifts to charities.

If you are married, both you and your spouse can give separate gifts of up to $10,000 to the same person each year without making a taxable gift.

For more information, get the IRS Publication 950, "Introduction to Estate and Gift Taxes," IRS Form 709 or 709-A, "United States Gift Tax Return," and "Instructions for Form 709." They are available at the IRS Web site at www.irs.gov under the "Forms & Pubs" section. They are also available at local IRS offices or by calling 1-800-829-3676.