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Calculate federal gift tax, annual exclusion usage, and lifetime exemption consumed for any gift. Plan tax-free transfers to family members under current IRS annual exclusion limits.
The IRS gift tax applies when you transfer money or property to another person without receiving full market value in return. For 2024, the annual exclusion is $18,000 per recipient. Gifts at or below this amount do not need to be reported and do not reduce your lifetime exemption. Gifts exceeding the annual exclusion first consume your remaining lifetime unified credit ($13.61 million in 2024), which is shared with the estate tax exemption. Federal gift tax at rates up to 40% is only owed once the lifetime exemption is exhausted. Enter the gift value, the current annual exclusion, how much lifetime exemption you have already used, and the total lifetime limit. The calculator returns the taxable gift amount after the annual exclusion, how much of your lifetime exemption this gift uses, your remaining exemption, and any gift tax due.
The annual exclusion allows you to give up to $18,000 per person per year (2024) without any gift tax filing requirement or reduction of your lifetime exemption. In 2025, this increases to $19,000. You can give this amount to as many different people as you like. Married couples can combine their exclusions to give $36,000 per recipient (gift splitting).
Not necessarily. Gifts above the annual exclusion first reduce your lifetime exemption ($13.61 million in 2024). You only owe gift tax out of pocket if your cumulative taxable gifts exceed your entire lifetime exemption. Most people never pay gift tax - the exemption covers substantial wealth transfers. You do need to file Form 709 to report taxable gifts.
Gifts between US citizen spouses are completely unlimited and tax-free under the marital deduction. If your spouse is not a US citizen, an annual exclusion of $185,000 (2024) applies instead of the standard $18,000 exclusion. Gifts to charities are also fully deductible and not subject to gift tax.
Under current law, the elevated exemption amount is scheduled to sunset after December 31, 2025, reverting to approximately $7 million (inflation-adjusted). The IRS has confirmed that gifts made before the sunset under the higher exemption will not be clawed back if the exemption drops later, giving a strong incentive to use the exemption before 2026.
The donor (giver) is responsible for any gift tax owed, not the recipient. The recipient generally owes no income tax on the gift either. The recipient's cost basis in gifted property is the donor's original cost basis, which becomes relevant if they later sell the asset and need to calculate capital gains.
Have more questions? These calculators provide estimates for educational purposes only. For personalized financial advice, consult with a qualified financial professional. See our disclaimer for more information.