Estate and Gift Tax Exemption

The estate and gift tax exemption refers to the amount of money or property an individual can transfer to others during their lifetime through gifting or upon their death as part of their estate without incurring federal estate or gift taxes. 

Estate Tax Exemption

The exemption amount is subject to change based on legislation or inflation adjustments. In 2024, an individual can leave up to $13.61 million to heirs without incurring federal estate tax, and a married couple can leave up to $27.22 million. Any transfers in excess of this amount may be subject to federal gift or estate taxes. 

Gift Tax Exemption

Annual Gift Tax Exclusion

Every individual is allowed an annual gift tax exclusion, which allows them to gift a certain amount of money or property each year without incurring gift tax. In 2024, the annual gift tax exclusion is $18,000 per recipient. This means the giver may gift up to $18,000 to as many recipients as they want each year without being taxed. Married couples may gift up to $36,000 per recipient per year without incurring the gift tax. 

Lifetime Exemption

In addition to the annual gift tax exclusion, each individual has a lifetime gift tax exemption that allows them to gift a certain amount of money or property throughout their lifetime without triggering the gift tax. In 2024, that amount is $13.61 million per individual and $27.22 million for married couples.