Correct, you can keep on giving until your money runs out! If you were Bill Gates, you could give One Million Americans (and/or foreigners), $13,000 each – a total of $13 Billion – in 2009 and 2010 and there still would be no Gift Tax. (If Gates’ wife joined in, the couple could gift, in 2009 and 2010, $26,000 to each of the One Million individual recipients – a total of $26 Billion in this calendar year – even on December 31st (if the gifts were "completed"). Then they could do it all over again January 1st of the following year.
The dollar amount for tax-free gifts is indexed annually for inflation. And the really good news is that the gifts under the indexed amount do not enter into the calculation of the Estate Tax or count against the federal unified credit.