What is the gift tax lifetime exemption?

What is the gift tax lifetime exemption?

The gift tax lifetime exemption is the total amount you can give away during your lifetime without incurring gift tax. As of 2023, this amount is $12.92 million.

How does it work if I give gifts to multiple people?

You can give gifts to multiple individuals without exceeding the exemption limit. Each gift counts towards your lifetime exemption, but you can also give up to $17,000 per person per year without it counting against the exemption.

What happens if I exceed the exemption amount?

If you exceed the lifetime exemption amount, you will owe gift tax on the excess amount. The tax rate can be quite high, so it's important to plan your gifts carefully.

Are there any exceptions to the gift tax rules?

Yes, there are exceptions, such as gifts to spouses, charitable donations, and payments for medical or educational expenses that do not count against the exemption.