The gift tax is used to prevent people from avoiding the

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Social Studies

Maren Haynes

16 March, 22:19

The gift tax is used to prevent people from avoiding the

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Campbell Davidson · Answer 1

The gift tax is used to prevent people from avoiding the estate tax.

The estate tax is what is paid when a person inherits some wealth. In order to avoid this, some people (typically elderly) would gift their property during their life - but then they will have to pay a tax too, the gift tax. This is done to prevent extreme wealth accumulation.