Gift Tax Rules
Give generously without owing tax by using the annual exclusion, the lifetime exemption, and gift splitting.
TL;DR
- Give up to
$19,000per person in 2026 with no gift tax and no filing. - Gifts above that draw down your
$15Mlifetime exemption first. - Couples can
giftSplitto give $38,000 per person together.
How Gift Tax Works
Giver PaysThe person making the gift owes any tax, not the receiver.
Receiver owes nothingTwo ShieldsGifts pass the annual exclusion, then the lifetime exemption.
Exclusion first, then exemptionTax Is RareYou owe only after the huge lifetime exemption is gone.
Up to 40% beyond $15MValue at Gift DateProperty gifts count at their fair market value.
FMV on the day you giveThe Two Limits
Annual ExclusionGive this much per person yearly with no filing.
$19,000 per recipient (2026)Any Number of PeopleThe exclusion applies separately to each recipient.
No limit on recipientsLifetime ExemptionCovers gifts above the annual exclusion before tax.
$15,000,000 per personShared With EstateThe same exemption also covers your estate at death.
Unified gift and estate exemptionGifts That Do Not Count
Direct TuitionPay a school directly and it is not a taxable gift.
Unlimited, paid to the schoolDirect MedicalPay a provider directly with no dollar limit.
Unlimited, paid to the providerSpouse GiftsGifts to a US-citizen spouse are unlimited.
Marital deduction, no capCharityGifts to qualified charities are not taxable gifts.
Deductible, not a taxable giftBigger Gifting Moves
Gift SplittingCouples combine exclusions for $38,000 per person.
$19,000 x 2 = $38,000529 SuperfundingFront-load five years of gifts into one.
Up to $95,000 per childWatch Below-Market SalesA bargain sale to family is a gift of the discount.
Sell low = gift the gapFile When RequiredForm 709 tracks big gifts even when no tax is due.
Over $19,000 = file 709Tips
- Pay tuition or medical bills straight to the school or provider; those payments are unlimited and separate from the
annualExclusion. - Front-load a 529 with five years of gifts at once, up to $95,000 per child, using the
5yearElectionon Form 709.
Warnings
- An interest-free family loan can count as a gift, since the IRS imputes interest below the
federalRateas one. - Selling an asset to family below
fairMarketValuecreates a taxable gift equal to the discount, whether you meant it or not.
In Practice
See how a couple stacks annual exclusions across givers and recipients with no return to file.
You and your spouse want to help your adult child and their spouse, using only the 2026 annual exclusion.
- You give $19,000 to your child and $19,000 to their spouse.
- Your spouse gives $19,000 to each of them as well.
- Total given: 4 gifts x $19,000 = $76,000.
- Each gift is within the exclusion, so no tax and no Form 709.
You move $76,000 to the couple in one year, completely tax-free.
Stacking exclusions across givers and recipients moves large sums with no paperwork.
FAQ
For 2026 you can give up to $19,000 to each person, to as many people as you like, with no tax and no return. Gifts above that amount are not immediately taxed either; they simply reduce your $15 million lifetime exemption. Only after that exemption is used up do you actually owe gift tax, at rates up to 40%.
The giver. The person receiving a gift owes no income tax on it and reports nothing. The giver is the one who tracks gifts against the annual exclusion and lifetime exemption, and who would owe any tax. That is why receiving even a large cash gift is tax-free to you.
It lets a married couple treat a gift made by one spouse as if each gave half. That doubles the annual exclusion to $38,000 per recipient even when the money came from one spouse. Both spouses must consent by filing Form 709 for that year, even if the split gift stays under the limit.
File Form 709 if you give any one person more than $19,000 in a year, if you elect gift splitting, or if you make a generation-skipping gift. It is due when your income tax return is. Filing usually does not mean you owe tax; it just tracks gifts against your lifetime exemption.