What is a past interest gift?

A past interest gift refers to a gift that confers immediate rights or benefits to the recipient. This means that the recipient can utilize the benefits of the gift right away, without any conditions or waiting periods. For example, if someone gives a piece of property or money outright, where the recipient has full control and immediate access, this would qualify as a past interest gift.

In contrast, other types of gifts involve different conditions or timing. Gifts that require the beneficiary to wait before they can utilize the gift, such as future interest gifts, would not meet the criteria of a past interest gift. Additionally, gifts intended to be retracted or those with restrictions are also not aligned with the concept of providing immediate benefits. Understanding these distinctions is crucial for recognizing different types of gifts within the context of donor tax practices.