FHA - Gifting Money for Home Purchase - Gift Tax - Sacramento, California

We are all aware and love the fact that in FHA transactions, we can have a relative gift the down payment. However, it has been brought to my attention recently that there could be tax complications for the giftor depending on the size of the gift. I would like to have perhaps some people knowledgable in this field shed some light on this matter. Below are some things that I have found which seems to be true but I have not verified with a CPA.

I appreciate all input.

You can give up to $12,000 in 2008 and $13,000 in 2009 to anyone without triggering the so-called gift tax. For example, in 2009 you could give $13,000 to your son, another $13,000 to your daughter, and $13,000 more to each of their spouses every year without having to pay taxes on the gifts. Your spouse can also give $13,000 per year to each person. If you give more than the limit, you must file a gift tax return. You probably won’t actually owe gift tax, however.

If I give more than $12,000 to my son, who pays the gift tax -- me or him?

You do -- or you would if you were liable for gift tax. You’ll have to give a lot more than $12,000 ($13,000 in 2009) before you have to start worrying about it, however, because any gift taxes due come off the lifetime estate tax exclusion that each individual has. The dollar amount of the lifetime estate tax exclusion is $2 million in 2008 and $3.5 million in 2009. In 2010, there is no federal estate tax, however it is scheduled to be reinstated with a $1 million limit in 2011.