Gift Tax
Definition
A federal tax on transfers of money or property to another person while receiving nothing (or less than full value) in return. The annual gift tax exclusion allows you to give up to $19,000 per recipient in 2025 without filing a gift tax return. Gifts above this amount count against your lifetime exemption ($13.99 million in 2025, shared with the estate tax exemption). Gifts to spouses (who are U.S. citizens), charities, and payments made directly to educational or medical institutions are unlimited and exempt.
Example
You give your daughter $25,000 in 2025. The first $19,000 is excluded. The remaining $6,000 must be reported on Form 709 and reduces your lifetime exemption, but no gift tax is owed unless you have exceeded the $13.99 million lifetime limit.
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