Imposition of Federal Gift Tax

Gifts totaling more than the annual exemption amount ($15,000 in 2018, $14,000 in 2016 and 2017) to one person in one year are referred to as taxable gifts and generate a potential Gift Tax. It does not matter if you give one $15,000 gift or 15 gifts of $1,000 each, or one gift of $13,000 and a "birthday gift" of $2,000. Gifts of a "future interest", no matter what their value, also are considered a taxable gift. Unlimited gifts can be made to a spouse who is a US citizen.

If you go over the $15,000 per person per year amount, you have to file IRS Form 709, to report the gifts.

Taxable gifts generate a Gift Tax. But Gift Tax is not due until you give away over $11.2 million in your lifetime, indexed for inflation (the lifetime federal exemption amount was doubled by the 2017 Tax Cuts and Jobs Act but starting 2026, the limit reverts to pre-2018 levels, also adjusted for inflation).