4.13. Annual Gift Tax Exclusion and Lifetime Gift Tax Exclusion

Gifts made from individuals to other individuals are subject to taxation (which is paid by the giver, not the receiver, of the gift). Fortunately, every individual has an annual gift tax exclusion that exempts from the gift tax a certain amount given by the individual (to all recipients combined) during a particular year. In 2022, the exclusion amount is $16,000, and it is $17,000 for 2023. For a married couple filing jointly, the annual exclusion is $32,000 for 2022 and $34,000 for 2023.

An individual is also allowed to give a certain amount to other individuals tax-free over the course of their lives. This is called the lifetime gift tax exclusion. For 2022, the lifetime gift tax exclusion is $12.06 million. This exclusion becomes important at death because the lifetime exclusion allows people to pass on up to $12.0