US Gift Tax Calculator

No. The gift recipient does not pay any federal gift tax — that responsibility falls entirely on the gift giver. You also do not need to report a gift as income on your federal tax return, regardless of the amount.

In 2025, you can give up to $19,000 per recipient per year without any gift tax consequences — this is called the annual exclusion. For 2026, this amount increases to $19,000 as well (per current IRS guidance). Married couples can combine their exclusions to give up to $38,000 per recipient annually through a process called gift splitting.

You must file IRS Form 709 (Gift Tax Return) if your gift to any one person exceeds the annual exclusion for that year. Filing a return does not necessarily mean you owe tax — it simply tracks your use of the lifetime exemption. Gifts within the annual exclusion do not need to be reported at all.

The lifetime gift tax exemption is the total amount you can give away over your lifetime — above the annual exclusion — before you owe any federal gift tax. For 2025, this amount is $13.99 million per individual ($27.98 million for married couples). Amounts above this threshold are taxed at rates up to 40%.

In 2025, the annual exclusion is $19,000, so a $20,000 gift would exceed it by $1,000. You would need to file Form 709 to report the $1,000 taxable portion. However, that $1,000 would simply be deducted from your lifetime exemption, and you would owe no gift tax unless you have already exhausted your full lifetime exemption.

Several types of transfers are completely exempt from gift tax regardless of amount: gifts to a spouse who is a US citizen, payments made directly to educational institutions for tuition, payments made directly to medical providers for someone's medical care, and gifts to qualifying political organizations or charities.

No. Inherited property is subject to estate tax rules, not gift tax rules. The gift tax applies only to transfers made during your lifetime. Property you receive as an inheritance is generally not taxable income to you, and any estate tax owed is paid by the estate itself before distribution.

The federal gift tax and estate tax are part of a unified transfer tax system and share a combined lifetime exemption. Any taxable gifts you make during your lifetime reduce the exemption available to your estate at death. This means large lifetime gifts can increase the estate tax owed by your heirs.