The annual gift reporting threshold has increased to $17,000 per recipient in 2023. This means that married taxpayers who elect to gift-split can make gifts of up to $34,000 per recipient annually without generating a taxable gift.
We want to point out that the term ‘gift tax’ can be misleading. While gifts may need to be reported on a timely-filed gift tax return, gifts are rarely large enough to trigger the gift tax.
For example, in 2023, the lifetime estate and gift tax exemption and generation-skipping transfer tax exemption is $12,920,000. All outright gifts to a spouse who is a U.S. citizen are free of federal gift tax reporting.
We welcome client conversations around gifting and estate planning strategies.