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Annual Gift Tax Exclusion for 2025. ... In this case, $1 million minus $19,000 = $981,000 counts against your lifetime gift tax exclusion amount. Large wedding or graduation gifts.
Barring an extension or new legislation, the lifetime estate and gift tax exemption is due to revert to the pre-2017 Tax Cuts and Jobs Act level of $5.49 million at midnight on Dec. 31, 2025.
In 2024, that annual gift exclusion was $18,000 and increased to $19,000 in 2025. These gifts are separate and in addition to your 2024 lifetime $13.61 million estate tax exemption.
The exemption amount is increased annually by an inflation adjustment as is the estate/gift tax exemption. With the enactment of the Tax Cuts and Jobs Act of 2017, these exemptions were doubled through December 31, 2025. Thus, as of January 1, 2024, the GST exemption amount is $13.61 million per person (inclusive of the inflation adjustment ...
Gifts above the annual exemption amount act to reduce the lifetime gift tax exclusion. [14] Congress initially passed the gift tax in 1932 at a much lower rate than the estate tax, a full 25% under the estate tax rate, while also providing a $50,000 exemption, separate from the $50,000 exemption under estate tax. [15]
The $11.2 million exemption specified in the Acts of 2010 and 2012 (cited above) applies only to U.S. citizens or residents, not to non-resident aliens or foreigners. Non-resident aliens and foreigners have a $60,000 exclusion instead, although this amount may be higher if a gift and estate tax treaty applies.
You’d have to give $13.99 million (as of 2025) over your lifetime to trigger taxes, so most people won’t come anywhere close to the lifetime cap, though Congress may raise or lower it.
For example, gifts up to a certain value per year per recipient are subject to the annual exclusion. [7] In the United States for example the amount is $15,000. Not eligible for the annual exclusion are the gifts that allow the recipient unrestrained access only at a later date or a future interest and these are fully taxable. [8]