Educational estimate using 2026 figures. Not tax or legal advice.
We apply the annual exclusion per recipient first; only gifts above it are taxable. Those reduce your $15M lifetime exemption — gift tax (40%) is due only once the lifetime exemption is fully used.
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The gift tax sounds scary but rarely costs anyone a dime. Each year you can give any number of people up to the annual exclusion ($19,000 in 2026) with zero paperwork. Go above that to one person and the excess simply chips away at your $15 million lifetime exemption — you still owe no tax until that whole exemption is exhausted.
Gifts within the annual exclusion leave your estate entirely, shrinking what’s ever subject to estate tax — and any future growth on those assets happens outside your estate too. It’s one of the simplest estate-planning moves there is. Just remember you file Form 709 to report gifts above the annual exclusion, even when no tax is due.
Up to the annual exclusion ($19,000 in 2026) per recipient, to as many people as you like.
The excess reduces your $15M lifetime exemption; no tax is due until that's exhausted.
Yes — gifts above the annual exclusion are reported on Form 709, even if no tax is owed.
Yes — both top out at 40% and share the same lifetime exemption.
No — it’s an educational estimate.