Hi,
I am currently on H1-B visa, awaiting permanent residency. In 2007, I gave 20,000 dollars to my mother (who lives in India) for any emergency expenses. My mother kept the money in her account, but has directed the interest to my account in India. I have two questions:
A) Should I have paid a "gift tax" on the 20,000 I gave to my mother in 2007?
B) Should I report the interest I get and pay taxes on that?

An informed advise would be highly highly appreciated.
Thanks!

$13,000 of the gift is excluded. If you are married to a US citizen or resident it is deemed that each of you contributed 10,000 each.

No tax is due since you can give away a million dollars before the tax cuts in.
See: Publication 950 (9/2008), Introduction to Estate and Gift Taxes

File a form 709: http://www.irs.gov/pub/irs-pdf/f709.pdf

On the interest earned in India it seems from what you say that your Mother is earning the interest and gifting that amount to you. No US tax is due on a gift.