Let’s discuss the gift tax rules for the United States in 2023:

Lifetime Exemption: You can gift $12.92 million (up from $12.06) over the course of your lifetime without incurring any gift tax. As a married couple, you can combine this amount for $25.84 million gifted before tax.


Gift Tax Rate: Any gift made in excess of your lifetime exemption will be subject to a 40% tax. In other words, if you are unmarried, the $12,920,000 and first dollar gifted will be subject to 40 cents tax.

More fun? There are additional gifts that are excluded from your lifetime exclusion.

Gift Tax annual exclusion: You can gift up to $17,000 a year (up from $16,000) to any number of individuals without eating into your $12.93 million lifetime exemption. If you are married, you and your spouse can combine to gift up to $34,000 per person, per year. This is in addition to your lifetime exclusion.

Even more fun? There are additional gifts that are excluded from both your lifetime exclusion and your annual exclusion.

Gifts to a Spouse: You can make unlimited tax-free gifts to your US citizen spouse.

Gifts to Charities: You can make unlimited tax-free gifts to qualified charitable organizations.

Gifts for Medical Expenses: You can make unlimited tax-free gifts for someone else’s medical expenses paid directly to the provider.

Gifts for Educational Expenses: You can make unlimited tax-free gifts for someone else’s tuition expenses paid directly to the educational institution. Not lab fees. Not housing. Not books or computers or athletic fees charged by the educational institution – only tuition is the freebie.

Here is an example to maximize your gifting each year.

Let’s assume your son Boo is the father of your darling granddaughter, Gracie. First, pay Gracie’s health insurance premium directly to the provider. Second, pay all other of Gracie’s medical costs by giving Boo a credit card that you pay, with which Boo can charge Gracie’s other medical expenses. Third, pay Gracie’s tuition directly to Gracie’s school. Finally, write Gracie a check for $17,000 and let Gracie pay for her books and athletic fees and lab costs.

You would be delighted to know of the many, many techniques I have available to leverage your gifting if you have a taxable estate. It is magic.


Everything you need to know about a planned giving plan and the IRS:


1:00 Merrell explains why she generally advises against her clients gifting large amounts

1:25 Krystal discusses a client who wants to gift the proceeds from a house sale to her children, and whether or not she’d be better off paying off their mortgages or making smaller gifts over the years to fall under the reporting requirements

2:06 Tax reporting, and IRS form 709

3:05 Gift tax rules, what has to be reported and what doesn’t

4:25 Gifts that don’t count toward the gift tax limit (tuition, medical expenses directly to the provider, charitable giving, etc.)

5:50 Splitting gifts with a spouse

6:45 What about gifting portions of a Family Limited Partnership?

10:00 Gifting a house – now or after you get on the bus?

12:00 Summarizing – conversations that need to be had about reporting, basis, and getting a professional to help fill out a 709




In this episode of Tax Boss, we discuss gift tax and how to help your clients make friends by giving their wealth away.


Marilyn Monroe estate plan

IRS Gift Tax FAQs


1:17 Gift reporting and gift tax rules; when drafting a will to leave everything to one person with instructions to divide it further

2:30 The burden of gift reporting requirements

3:10 Gifts in excess of $15,000 in any calendar year need to reported to the IRS (married couples may gift up to $30,000 in a calendar year between the two of them)

3:30 Exceptions

4:20 Gifts and lifetime exclusion

4:39 Back to burdening one individual with reporting, and why her ‘actual’ gift would be less than what counts toward her lifetime exemption amount

6:10 Explaining why a Personal Representative solution is much better

6:42 What if your friend doesn’t gift out your estate the way you plan? What if she is in the middle of a divorce? Or is being sued?

7:17 Marilyn Monroe’s estate planning fail – why a woman she never met inherited everything

8:17 Leaving assets to one person in the hope they’ll gift to another person is a very, very bad idea