US Gift Tax Calculator (Annual Exclusion + Lifetime Exemption)
Live- The 2025 annual exclusion is $19,000 per recipient ($38,000 for married couples gift-splitting). The 2025 lifetime exclusion is $13,990,000 per individual. The lifetime exclusion is scheduled to drop to roughly $7 million on 1 January 2026 unless Congress extends current law.
The US federal gift tax is one of the most generous in the world for high-net-worth individuals. Most gifts trigger no tax because of two overlapping exclusions: an annual exclusion that lets you give up to $19,000 per recipient per year (2025 figure, indexed annually) without using any lifetime exemption, and a lifetime exemption that shelters up to $13.99 million of gifts and bequests over your entire lifetime. Together, these exclusions mean a typical wealthy family can transfer millions of dollars to children and grandchildren without owing any federal gift tax.
This calculator computes the federal gift tax on a single year's gifts. It applies the annual exclusion per recipient first, then draws down the remaining lifetime exemption, and finally calculates tax (at the flat 40 percent gift-tax rate) on any amount above both exclusions. It also shows the remaining lifetime exemption available for future years.
A rough sanity check: a $25,000 gift to one child uses $19,000 of annual exclusion and $6,000 of lifetime exemption; no tax is owed. A $50,000 gift split among two grandchildren uses $38,000 of annual exclusion ($19,000 each) and $12,000 of lifetime exemption; again no tax. A $1.5 million single-recipient gift after $5 million of prior lifetime use draws down $1,481,000 of the remaining lifetime exemption ($13.99M minus $5M minus $1.5M leaves $7.5M); no tax owed.
Gift tax becomes payable only when both the annual exclusion is exhausted and the entire $13.99M lifetime exemption has been used up. At that point, any further gifts are taxed at a flat 40 percent. This is why estate planning for ultra-high-net-worth families focuses heavily on the lifetime exemption: using it during life through carefully-structured gifts (especially of appreciating assets) avoids tax on the future appreciation that would otherwise increase the estate.
A major planning consideration: the lifetime exemption is scheduled to drop to roughly $7 million per individual on 1 January 2026 unless Congress extends current law. This sunset has driven significant gift-tax planning activity in 2025 as families lock in the higher exemption while available.
How the annual exclusion works
The annual exclusion lets each individual give up to $19,000 to each recipient per calendar year (2025 figure) without reducing the lifetime exemption or owing any tax. The key word is each: a married couple can collectively give $38,000 per recipient by gift-splitting (each spouse contributes $19,000), without any tax or lifetime-exemption use. The exclusion is per-recipient, so a couple can give $38,000 each to as many recipients as they want.
The annual exclusion is use-it-or-lose-it. Unused annual exclusion does not carry forward to future years; each year's exclusion is independent. This is why systematic annual giving programs are a foundational element of estate planning: a couple with three children and seven grandchildren can transfer $380,000 per year (10 recipients times $38,000 split-gift exclusion) without using any lifetime exemption. Over 20 years that totals $7.6 million transferred completely tax-free.
The lifetime exemption
Gifts above the annual exclusion start drawing down the lifetime exemption rather than triggering tax. The 2025 federal lifetime exemption is $13.99 million per individual, which means a married couple can shelter up to $27.98 million during their lifetime. The lifetime exemption is unified with the estate tax exemption: amounts used during life reduce the amount available to shelter the estate at death.
A gift in excess of the annual exclusion is reported on IRS Form 709, and the lifetime-exemption draw-down is tracked across years. The recipient owes no tax on the gift; the gift tax is the giver's responsibility, and it accrues only when the lifetime exemption is fully used up.
The $13.99M exemption is scheduled to sunset on 1 January 2026 to about $7 million per individual (the 2017 level indexed for inflation), unless Congress extends current law. The threshold drop is dramatic: ultra-high-net-worth families have an incentive to lock in the higher exemption by making large gifts before the sunset.
What counts as a gift
Most transfers without full and adequate consideration are gifts: cash, securities, real estate, business interests, jewelry, art, and the like. Some transfers do not count as gifts: payments for medical care made directly to the medical provider, tuition payments made directly to an educational institution, gifts to a US-citizen spouse (unlimited), and gifts to qualifying charities.
The direct-payment exception for medical and tuition is widely used in family wealth transfer. Paying a grandchild's college tuition directly to the university (not through the parents or the grandchild) does not use any annual exclusion or lifetime exemption. The same applies to medical bills paid directly to a provider. This allows substantial transfers to younger generations on top of the annual exclusion.
Strategies for the 2026 sunset
As of mid-2025, the scheduled drop in the lifetime exemption from $13.99M to about $7M on 1 January 2026 has driven a wave of planning activity. The basic strategy: use the high exemption while it is available by making large gifts before the sunset.
Common structures: outright gifts to children or grandchildren of cash or marketable securities; gifts of business interests or real estate at discounted valuations (using LP/LLC structures to support discounts); gifts to dynasty trusts (SLATs, Spousal Lifetime Access Trusts) that benefit the spouse for life but pass to children at death; intentionally defective grantor trusts that allow the grantor to pay income tax on trust earnings, effectively gifting more wealth.
The IRS has issued guidance (Revenue Ruling 2019-12 and related) clarifying that gifts made before 2026 will not be subject to clawback if the exemption later drops. This means the strategy of using the high exemption now is durable: gifts made under the $13.99M exemption stay tax-free even if the exemption drops to $7M later.
What this calculator does not include
Gifts to a US-citizen spouse (unlimited and not subject to gift tax). Charitable gifts (deductible from gift tax and income tax). Direct payment of medical bills and tuition (excluded from gift tax). Gift-splitting between married spouses (effectively doubles the annual exclusion per recipient). State gift taxes (Connecticut is the only state with a separate state gift tax in 2025). Valuation discounts for gifts of business interests, partnership interests, or fractional real estate (typically 20 to 40 percent discounts available under tax law). The generation-skipping transfer tax (GST) which can apply to gifts to grandchildren and great-grandchildren on top of regular gift tax. The 2026 sunset of the lifetime exemption from $13.99M to approximately $7M. For substantial gift-tax planning, work with a CPA and estate-planning attorney; this calculator handles the routine annual-and-lifetime exclusion math for single-year gifts.
Frequently asked questions
$19,000 per recipient (up from $18,000 in 2024). A married couple can effectively give $38,000 per recipient by gift-splitting. There is no limit on the number of recipients; a couple with three children and seven grandchildren can transfer $380,000 per year without any tax or lifetime-exemption use.
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