Can I Gift During My Lifetime Without Concern for the Federal Gift Tax?
Sure – you can give away $15,000 per year to as many individuals you want free of the federal Gift Tax ($30,000 for a married couple who elect to split the gift). You also can give gifts to qualified charities – regardless of amount -- without triggering Gift Taxes. The individuals can be your family members (for example, you can make such gifts to each of your children and each of their spouses and each of your grandchildren and each of their spouses, to parents and grandparents, to uncles, nieces and nephews, etc. ) or to friends, or to any other category of individual you select, regardless of their citizenship.
For example, if you wanted to give away $14 Million this year, you could give $15,000 to each of one thousand individuals – whether relatives, friends, the top 1,000 graduates of your alma mater or high school, or even the first 1,000 strangers you walked up to. Even though you gave away a total of $14 Million there would be no Gift Tax. And on January 1st next year you may make similar gifts all over again -- also without Gift Tax.
Gifts exceeding the annual exemption are taxable gifts and must be reported on Form 709 each year, even though no gift tax is due. The amount you report will be tallied up and after you die will be subtracted from your estate tax exemption (known as the unified gift and estate tax). Tax is owed only after your lifetime taxable gifts and transfers at death exceed the lifetime estate and gift tax exclusion amount of $11.4 million on estates of decedents who die during 2019. (The Tax Cuts and Jobs Act of 2017 doubled the prior exclusion for a 2018 date of death to $10 million, but did not take into account the annual adjustment for cost of living increases. In 2026, under the 2017 Act, the exclusion amount will return to the 2017 levels, also adjusted for inflation).