The short version
You can give up to a set amount per recipient every year with no gift tax and no effect on your lifetime exemption. There is no limit on the number of recipients, and a married couple can combine their exclusions to double the amount to any one person.
Above the annual exclusion, the lifetime gift and estate tax exemption is the amount you can transfer over your lifetime or at death before the 40% federal transfer tax applies. OBBBA just made the elevated exemption permanent.
The annual exclusion: use it or lose it
| Item | 2026 amount |
|---|---|
| Annual exclusion per recipient | $19,000 |
| Married couple, per recipient (gift splitting) | $38,000 |
| Annual exclusion to a non-citizen spouse | $194,000 |
This is the workhorse of family wealth transfer. A couple with three children can move $114,000 a year to them combined, every year, entirely outside the estate and without using any exemption. Over a decade that adds up quickly, and all the future growth on those gifts is out of your estate too.
The lifetime exemption: now permanent at a higher level
| Year | Lifetime exemption per individual | Married couple |
|---|---|---|
| 2025 | $13.99 million | $27.98 million |
| 2026 (OBBBA) | $15 million | $30 million |
This is the headline change. Before OBBBA, the elevated exemption was scheduled to sunset at the end of 2025 and drop to roughly $7 million per person. OBBBA repealed that cliff, set the exemption at $15 million per individual for 2026, made it permanent, and indexed it for inflation going forward. The top transfer tax rate above the exemption remains 40%.
Strategies beyond writing a check
What changed in the planning: the old urgency to rush large gifts before a year-end deadline is gone. That does not make gifting pointless. Moving appreciating assets out of your estate now still removes all their future growth from estate tax, which is often the larger prize.
- Gift appreciating assets, not just cash. Moving an asset likely to grow shifts all of its future appreciation out of your taxable estate. The earlier you gift it, the more growth escapes.
- Pay tuition and medical bills directly. Amounts you pay straight to a school or medical provider for someone else are unlimited and do not count against either the annual exclusion or the lifetime exemption.
- Superfund a 529 plan. You can front-load five years of annual exclusion gifts into a 529 in a single year, accelerating tax-free growth for education.
- Use spousal portability. A surviving spouse can inherit the unused exemption of the first spouse to die, but it generally requires filing an estate tax return to elect it.
The basis tradeoff to weigh
Gifting during life is not always better than leaving an asset at death. When you gift an appreciated asset, the recipient generally takes your original cost basis, so they inherit the built-in gain. Assets passing at death generally receive a step-up to fair market value, erasing that gain for income tax purposes. For highly appreciated assets where estate tax is not a concern, holding until death can actually be the better income tax answer.
Where this trips people up
Filing, or not filing, Form 709
Gifts above the annual exclusion require a gift tax return to report and track exemption use, even when no tax is due. Skipping it leaves your exemption tracking a mess for your estate later.
Ignoring state-level estate and inheritance taxes
The federal exemption is generous, but several states impose their own estate or inheritance tax at far lower thresholds. The federal picture is not the whole picture.
Gifting low-basis assets without considering step-up
Giving away a highly appreciated asset can hand your heirs a large embedded gain that a step-up at death would have erased. Match the strategy to whether estate tax or income tax is the real exposure.
Gifting questions people ask
How much can I give each year without tax?
$19,000 per recipient in 2026, to as many people as you like, with no effect on your lifetime exemption. A married couple can give $38,000 per recipient by splitting gifts.
What is the lifetime exemption in 2026?
$15 million per individual, or $30 million for a married couple. OBBBA made this permanent and indexed it for inflation, repealing the scheduled drop to roughly $7 million.
Do I owe tax if I give more than $19,000 to one person?
Usually not. Amounts above the annual exclusion use part of your lifetime exemption, reported on Form 709, but no tax is actually due until your cumulative gifts exceed the lifetime exemption.
Is it better to gift now or leave assets at death?
It depends. Gifting removes future growth from your estate, but the recipient takes your basis. Assets left at death generally get a step-up that erases the gain. The right answer turns on whether estate tax or income tax is your real exposure.
Can I pay my grandchild's tuition on top of the annual gift?
Yes. Tuition paid directly to the school and medical expenses paid directly to the provider are unlimited and do not count against the annual exclusion or lifetime exemption.
Keep reading
Estate planning and the CPA
How gifting fits the larger plan, and what your attorney handles. →
Giving appreciated stock
The mechanics of gifting shares, to family or charity. →
Donor-advised funds
If some of that wealth is headed to charity rather than heirs. →
All resources
Browse every explainer in one place. →
Ready to start moving wealth to the next generation?
With the exemption now permanent, family gifting is about being deliberate rather than beating a deadline. I can help you weigh the gift-versus-step-up question and coordinate the strategy with your estate attorney. Here is how to start a conversation.
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Andrew Sedlacek, CPA
Founder, OGCPA
Andrew is a Certified Public Accountant and the founder of OGCPA. He built his tax career at a local Bend firm and on Deloitte's tax team before founding the firm in 2019, and began professionally as a licensed financial advisor. He focuses on equity compensation, liquidity events, and the tax side of charitable giving and wealth distribution, and serves as the tax subject-matter expert for a venture-backed AI company. He works with clients across Bend, Oregon and the San Francisco Bay Area.
This article is general information, not tax or legal advice for your specific situation. Tax outcomes depend on your individual facts, and the rules change over time. Figures cited reflect 2025 and 2026 amounts and the changes made by the One Big Beautiful Bill Act. Talk to a qualified professional (I am happy to be that person) before acting on anything here. Reading this page does not create a client relationship.