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You may give any one person up to $13,000 in total gifts without filing a gift tax return (from 2009 – 2011). This limit includes all gifts for the year, not just money or property. It includes birthdays, graduations, holidays, etc. If you give over this, you would be required to file the gift tax return. In terms of her needing to report this as income, I believe there is a tax free gift allowance up to
each EUR 400.000