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There is no gift tax on gifts less than $10,000.

Gift taxes are always paid by the giver, not the recipient. And you can do stuff with reducing the eventual estate tax-free amount that I don't begin to understand, so I'll let someone else explain.

You won't owe the IRS anything on the gift. (Although you will obviously owe taxes on any interest you make on the money.)

BUT, the situation you describe is fraught with peril:
My great aunt is going into a nursing home and she has to divest herself of her cash assets and other goodies in order to get Medicaid/medicare(whoever) to pay for it.

There are recent legal changes to prevent people from giving away all of their money simply to qualify for Medicare. I recommend you don't do anything with the money just yet and get more financial advice first, in case some of it is needed to help finance your great aunt's medical care.

I'm sure you'll get a more complete answer shortly.

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