There&#x27;s always a cutoff just due to practicality. If you give a friend $5 probably neither of you filed taxes for that. If you give a friend $10m, well, the IRS will probably notice that one.<p>(in the case of a gift tax the cutoff is $14k and yes it applies to your children, see: <a href="https:&#x2F;&#x2F;www.irs.gov&#x2F;Businesses&#x2F;Small-Businesses-&amp;-Self-Employed&#x2F;Frequently-Asked-Questions-on-Gift-Taxes" rel="nofollow">https:&#x2F;&#x2F;www.irs.gov&#x2F;Businesses&#x2F;Small-Businesses-&amp;-Self-Emplo...</a> )