Gift Tax Calculator
Gift, exclusion & rate
Your result will appear here
Fill in the fields and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- United States — federal income and payroll tax, unless the calculator names a state or local levy
- Rules and time period
- Tax years supported by the selected calculator. Brackets, standard deductions and wage bases are re-set every year, and state and local rules are not modeled unless the page says so.
- Scope and limitations
- Educational estimate only, not a tax return, a filing determination or a withholding instruction. Confirm current law and your own facts with the IRS, your state authority or a qualified tax professional before filing or changing a W-4.
- Source links checked
- Sep 19, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter the gift amount — the full value of what you are handing over this year to one person. For property rather than cash, use fair market value on the date of the gift, not what you originally paid for it.
- 02
Set the annual exclusion. This is the amount you may give each recipient each year before anything is reportable: $18,000 for 2024 and $19,000 for 2025. It is indexed for inflation and does not move every year, so confirm the figure for the year of your gift.
- 03
Set the gift tax rate. The federal rate on a taxable gift tops out at 40%, and that is the figure to use unless you are modeling one of the lower brackets that apply before the lifetime exemption is exhausted.
- 04
Open Advanced and set the number of recipients if you are splitting one pot between several people. The exclusion is per recipient, so giving $57,000 across three people can fall entirely inside it while the same amount to one person does not.
- 05
Still in Advanced, enter any remaining lifetime exemption you intend to apply. The basic exclusion is $15 million per person for 2026 ($13.99 million for 2025); while it lasts, it absorbs the excess above the annual exclusion and no tax is actually paid.
- 06
Read the taxable portion, the tax due and the total cost to the giver. The last figure matters most: gift tax is paid by the giver on top of the gift, so a taxable gift costs more than its face value.
Formula
Federal gift tax is a subtraction problem before it is a multiplication: Total exclusion = annual exclusion × recipients After exclusion = max(0, gift − total exclusion) Taxable gift = max(0, after exclusion − lifetime exemption applied) Gift tax = taxable gift × rate Total cost to giver = gift + gift tax The order is what people get wrong. The annual exclusion comes off first and is per recipient per year — it never touches your lifetime exemption. Only what survives that reaches the lifetime exemption, and only what survives *both* is taxed at all. This is why most large gifts produce a filing obligation but no payment: crossing the annual exclusion means Form 709 is due, while the lifetime exemption means the tax line reads zero. The exemption is unified with the estate tax, so every dollar used here is a dollar unavailable to the estate later.
Example
You give your daughter $250,000 toward a house. The annual exclusion is $19,000, so $231,000 is above it. You have your full $15 million lifetime exemption available and elect to apply it, so no tax is due — but Form 709 is still required, and your remaining exemption drops to $14,769,000. Now the same gift with no exemption left. The $231,000 is taxable at 40%, giving $92,400 of gift tax. The total cost to you is $342,400, not $250,000 — the tax rides on top of the gift rather than coming out of it. Splitting changes the picture again. If you are married and elect gift splitting, the gift is treated as $125,000 from each of you, two annual exclusions apply, and $212,000 is above them instead of $231,000.
Definitions
- Gift
- Any transfer where you receive less than full value in return — cash, property, a forgiven loan, or an interest-free loan's imputed interest.
- Annual exclusion
- The amount you may give each recipient each calendar year with no reporting and no use of your lifetime exemption. $18,000 for 2024 and $19,000 for 2025; it is indexed but moves only in $1,000 steps, so confirm the current year figure.
- Lifetime exemption (basic exclusion amount)
- The cumulative total you may give above the annual exclusions before tax is actually owed — $15 million per person for 2026, up from $13.99 million for 2025 under P.L. 119-21, and indexed thereafter. Unified with the estate tax exemption.
- Taxable gift
- Strictly, what remains after the annual exclusion and any charitable or marital deduction. It is reported on Form 709 and permanently reduces your lifetime exemption even when the unified credit means no tax is paid. This calculator subtracts the exemption before applying the rate, which reaches the same tax under a flat rate but is a shortcut rather than the statutory order.
- Donor
- The person making the gift, and the person who owes any gift tax. The recipient normally owes nothing.
- Donee
- The person receiving the gift. They take your cost basis in the property rather than a fresh one.
- Form 709
- The United States Gift (and Generation-Skipping Transfer) Tax Return, due when a gift to one recipient exceeds the annual exclusion — even when no tax is payable.
- Gift splitting
- An election letting a married couple treat a gift by one spouse as made half by each, doubling the annual exclusion available. It requires filing Form 709.
- Marital deduction
- Gifts to a United States citizen spouse are unlimited and excluded entirely. A non-citizen spouse has a separate, capped annual amount instead.
- Charitable deduction
- Gifts to qualifying charities are excluded without limit for gift tax purposes.
- Educational and medical exclusion
- Tuition paid directly to the institution and medical bills paid directly to the provider are unlimited and do not use the annual exclusion. Paying the person instead forfeits this.
- Carryover basis
- The recipient inherits your original cost basis, so an appreciated asset carries its built-in gain to them. Property left at death gets a stepped-up basis instead.
- Unified credit
- The mechanism that delivers the lifetime exemption — a credit against tax rather than a deduction from the gift, which is why the exemption and the estate exemption share one pool.
- Generation-skipping transfer (GST) tax
- A separate 40% tax on gifts to grandchildren or others two or more generations below you, with its own exemption. Not modeled here.
Good to know
What counts as a gift, and why the definition is wider than you think
A gift, for federal tax purposes, is any transfer where you receive less than full value in return. That plain definition catches far more than the birthday check most people picture. Selling your daughter a house worth $500,000 for $300,000 is a $200,000 gift. Forgiving a loan is a gift of the outstanding balance. Lending money at no interest is a gift of the interest you did not charge. Adding someone to a bank account or a deed can be a gift of their share the moment they gain the right to withdraw or sell. What matters is the transfer of value, not the label on it or the intention behind it. You do not need to have meant it as a gift, and there is no requirement that it be generous or celebratory. The tax code is asking a mechanical question: did value move from you to someone else without something of equal value coming back? This is why the gift tax rules surface in situations that feel nothing like gift-giving — family business transfers, helping a child buy a first home, restructuring who owns what before a marriage or a move. In each case a value moved, and the system wants a record of it. The reason for that record is not usually to collect tax. It is to keep score. The federal gift tax exists mainly to stop people emptying their estate during their lifetime to avoid the estate tax. The two taxes share one exemption, and every reportable gift is a debit against it. Understanding gift tax means understanding that you are almost never filing to pay — you are filing to record how much of a shared allowance you have spent. There is one more reason the definition matters: the burden of proof runs toward you. Where a transfer between family members looks like a bargain, the tax authorities may treat the shortfall as a gift unless the transaction is documented as arm's length — an appraisal, a written agreement, evidence that the price reflected the market. Families who transfer property casually and describe it afterwards are in a much weaker position than families who papered it at the time. The paperwork is not a formality; it is the evidence that decides whether a transfer was a sale or a gift.
The annual exclusion: the number that keeps most gifts invisible
The annual exclusion is the amount you may give each recipient, each calendar year, with no filing and no use of your lifetime exemption. It was $18,000 for 2024 and $19,000 for 2025, and it is indexed for inflation in increments that move it every year or two. The three qualifying words are all doing work. *Each recipient* means the limit is not a single annual allowance — it multiplies by the number of people you give to. *Each calendar year* means it resets on 1 January and does not accumulate; an unused exclusion is gone. And *no filing* means gifts inside the exclusion are genuinely invisible to the system, with nothing to report and nothing to track. The practical consequences are substantial. A married couple with three children can move $114,000 a year to them — two donors, three recipients, $19,000 each in 2025 — with no return, no exemption used, and no paperwork. Do the same on 31 December and 1 January and $228,000 moves across two calendar years in eight days. This is why the exclusion is the first tool in almost every transfer plan. It is not a loophole; it is a deliberate simplification so that ordinary generosity does not generate returns. But it rewards structure. The same $114,000 given as one check to one child crosses the exclusion by $95,000, requires Form 709, and consumes exemption — the money arrives at the same place, and only the arrangement differs. One condition is easy to miss: the gift must be of a *present interest* — something the recipient can use now. Money placed in a trust they cannot touch for twenty years generally does not qualify, which is why trust gifts are drafted with withdrawal rights that give the recipient a real, if brief, ability to take the money. One practical refinement is worth knowing. The exclusion applies per calendar year, and a check is a gift when it is cashed rather than when it is written. A gift dated 30 December but banked in January generally falls into the new year, which can quietly waste one year's exclusion and consume the next. Where timing matters — because you are deliberately using two years' exclusions in quick succession — an electronic transfer that settles on a known date removes the ambiguity entirely. Small mechanical details like this decide whether a plan works as intended.
The lifetime exemption, and why you file a return that owes nothing
Cross the annual exclusion and a return becomes due — but tax almost never does. The excess is charged against your lifetime exemption, which is $15 million per person for 2026 (it was $13.99 million for 2025, raised by P.L. 119-21). Only when that pool is exhausted does anyone write a check. This is the single most misunderstood feature of the gift tax. People hear that they have exceeded the annual exclusion and assume a bill follows. In reality the overwhelming majority of Form 709 filings report zero tax due. The return exists to record the debit, not to collect. That record matters because the exemption is *unified* with the estate tax. There is one pool covering both lifetime gifts and what you leave behind. Give $2 million above the annual exclusions during your life and your estate has $2 million less shelter available. The IRS reconciles a lifetime of Forms 709 against the estate return, which is why an unfiled 709 is a problem that surfaces decades later, at the worst possible moment, when the person who could explain it is gone. The strategic question is when to use exemption rather than whether. Using it early moves not just the asset but all of its future growth outside your estate. Gift a business interest worth $1 million that becomes worth $5 million and you have used $1 million of exemption to move $5 million. Wait, and the whole $5 million is in your estate. Against that sits basis. A lifetime gift carries your original cost basis to the recipient; property left at death is stepped up to its date-of-death value, erasing the built-in gain entirely. For a highly appreciated asset held by someone whose estate will not be taxable anyway, gifting can create an income tax cost where none existed. The right answer depends on which tax you are actually exposed to. A related question is whether to use exemption before the law changes it. The exemption has been legislated up and down repeatedly, and there have been periods when it was scheduled to fall sharply on a known date. Where that happens, the choice is between using exemption while it is large and losing the ability to. Rules have generally been written so that gifts made under a higher exemption are not clawed back if the exemption later falls, which makes early use a genuine one-way option — but it is an option that only pays if you have assets you can afford to part with permanently.
Gift splitting, spouses, and the transfers that are exempt outright
Several categories of transfer sit entirely outside the gift tax, and knowing them prevents both unnecessary filings and expensive mistakes. Gifts to a spouse who is a United States citizen are unlimited. The marital deduction removes them completely — no exclusion used, no exemption spent, no return. You can transfer everything you own to a citizen spouse with no gift tax consequence at all. A non-citizen spouse is treated differently, with a separate annual limit that is far larger than the ordinary exclusion but not unlimited. Gifts to qualifying charities are likewise unlimited for gift tax purposes. Then there is the exclusion people most often forfeit by accident: tuition paid directly to an educational institution, and medical expenses paid directly to a provider, are unlimited and do not touch your annual exclusion. A grandparent can pay a full private school fee and a hospital bill in the same year as a $19,000 cash gift, and all three are clean. The word doing the work is *directly*. Write the check to the school and it is excluded; write it to the parent to pass on and it is an ordinary gift. Gift splitting is the remaining lever for married couples. By electing on Form 709, a gift made by one spouse is treated as made half by each, so two annual exclusions apply. A $38,000 gift from one spouse's account becomes two $19,000 gifts and falls entirely inside the exclusion for 2025. The election requires both spouses to consent and applies to all gifts made that year, not selectively — so it is a decision about the year, not about one transfer. The direct-payment exclusion deserves one more note because of how often it is wasted. It covers tuition only — not room and board, not books, not travel, not a laptop. A grandparent paying a full college bill directly to the institution excludes the tuition portion without limit, while the accommodation portion is an ordinary gift against the annual exclusion. Splitting the payment so the tuition goes directly to the school and the living costs are handled separately captures the exclusion cleanly, and costs nothing but a second transfer.
Basis: the cost that travels with the gift
When you give property rather than cash, you give away more than the asset. You also hand over your cost basis — and with it, every dollar of unrealized gain that accumulated while you owned it. Suppose you bought shares for $50,000 that are now worth $300,000. Give them away and the recipient's basis is $50,000, not $300,000. If they sell immediately they realize a $250,000 capital gain and owe tax on all of it, even though they received the shares moments earlier and did nothing to earn the appreciation. Compare that with leaving the same shares in your estate. Assets passing at death receive a step-up in basis to their date-of-death value. The heirs' basis is $300,000, the $250,000 of accumulated gain vanishes for tax purposes, and selling immediately produces no capital gains tax at all. This single difference reverses the usual advice for many families. If your estate will never approach the exemption, giving appreciated assets away during your life can convert a tax you were never going to pay into one your children definitely will. Holding the asset is the cheaper answer. The calculus flips when the estate genuinely will be taxable, or when the asset is expected to appreciate sharply from here. Then removing future growth from a 40% estate tax can outweigh the capital gains cost of the carryover basis. There is one refinement worth knowing: if the property has *fallen* in value, the recipient's basis for calculating a loss is limited to the fair market value at the time of the gift, not your higher cost. You cannot transfer a built-in loss to someone else to use. Gifting a depreciated asset generally wastes the loss — selling it yourself and gifting the proceeds preserves it. There is a planning consequence that follows directly. For an appreciated asset, the question is which tax you are actually exposed to. Someone whose estate will comfortably clear the exemption should consider gifting cash and holding appreciated assets until death, so the family gets the step-up on the gain and the estate is reduced by the cash. Someone whose estate will never be taxable should generally hold appreciated assets and give cash, for the same reason viewed from the other side. The asset you choose to give matters as much as the amount.
Loans, family arrangements, and the transfers that become gifts by accident
Most unintended gift tax problems come from arrangements that felt like something other than a gift at the time. An interest-free family loan is the classic case. If you lend a child $400,000 to buy a house and charge no interest, the tax code treats you as having gifted the interest you did not charge, measured against a published minimum rate. The fix is simple — charge at least the applicable federal rate and document the loan properly — but it must be done at the outset, not reconstructed afterwards. Forgiving a loan is a gift of the outstanding balance in the year you forgive it. Family loans that were never really expected to be repaid can accumulate into a substantial gift when the arrangement is finally acknowledged. Adding a name to an asset can be a gift. Putting an adult child on the deed of your house gives them a share, and the value of that share is a gift the day it happens. Adding them to a bank account is generally not a gift until they actually withdraw funds they did not contribute — but the deed transfer is immediate. Below-market sales within a family are part sale, part gift. Selling a $600,000 property to a relative for $400,000 is a $200,000 gift, regardless of how the transaction was papered. Paying someone else's debts — a mortgage, a credit card, a tax bill — is a gift to that person of the amount paid, unless it falls into the direct tuition or medical exclusion. None of these is a trap in the sense of a hidden penalty. They are consequences of the same plain rule: value moved without equal value coming back. The cost of ignoring them is not usually tax, but an unrecorded use of exemption that surfaces when the estate is settled. The remedy in most of these cases is the same and it is unglamorous: document the arrangement at the time, in writing, on terms a stranger would have accepted. A family loan with a signed note, a stated interest rate at or above the published minimum, a repayment schedule and evidence of actual payments is a loan. The same money handed over with a verbal understanding is, in substance and increasingly in law, a gift. The paperwork costs an hour and settles a question that otherwise surfaces years later when nobody can remember what was agreed.
Filing: what Form 709 asks and when it is due
Form 709 is due when a gift to any one recipient exceeds that year's annual exclusion, when you elect gift splitting, or when you give a future interest regardless of amount. It is filed for the calendar year and due at the same time as your income tax return, with the same extension available. What it collects is a cumulative record. The form asks for the gifts made this year and the total taxable gifts of all prior years, because the rate schedule and the exemption are applied cumulatively across your lifetime rather than resetting annually. This is why the returns must be kept: each one depends on the last, and the final reckoning at your estate depends on all of them. Valuation is where the real work sits. Cash is straightforward. Publicly traded securities are valued at the mean of the high and low on the date of the gift. Anything else — real property, a business interest, an artwork, a fractional share of a partnership — needs a defensible appraisal, and for interests that lack control or marketability, valuation discounts can legitimately reduce the reported value well below a pro-rata share of the whole. Filing also starts a clock. Once a gift is adequately disclosed on a return, the IRS generally has three years to challenge its valuation. Without a filing, or with inadequate disclosure, that period never begins — leaving the valuation open to challenge indefinitely, long after the records and the people who could explain them are gone. That is the strongest practical argument for filing carefully even when nothing is owed: the return is what closes the question. Late filing is worth addressing directly, because it is common and not fatal. Where gifts should have been reported and were not, the usual course is to prepare the missing returns and file them, and where no tax was due there is typically no penalty tied to the amount — penalties are generally computed on tax owed. The greater exposure is the open valuation period and the missing record of exemption used. Filing late is almost always better than not filing, and it is a much smaller problem to solve while the person who made the gifts is alive to explain them.
What this calculator does not model, and when to get advice
This tool applies one flat rate to the amount left after your exclusions. That structure is right, and for most planning questions the answer is close enough to be useful. But several real features of the tax sit outside it. The federal rate schedule is graduated, not flat. The 40% figure this calculator is built around is the top rate, and it is the rate that matters for anyone who has exhausted the lifetime exemption. Before that point the lower brackets apply — though in practice they are absorbed by the unified credit and rarely produce an actual payment. Prior taxable gifts are not modeled. Because the tax is cumulative, this year's gift is stacked on top of every previous taxable gift when the rate is applied. A calculator considering one gift in isolation cannot see that history. The generation-skipping transfer tax is not modeled at all. Gifts to grandchildren, or to anyone two or more generations below you, can attract a separate 40% tax with its own exemption, on top of gift tax. For families gifting down two generations this is a material omission. Valuation discounts, trust structures, Crummey withdrawal rights, qualified personal residence trusts, grantor retained annuity trusts and the rest of the planning toolkit are all outside scope. And state rules vary. Connecticut has a state gift tax; other states do not, but several have estate or inheritance taxes with thresholds far below the federal exemption, which can make lifetime gifting worthwhile for reasons this calculator never sees. Use this to size the question — how much is above the exclusions, roughly what it would cost if exemption were gone, what the transfer really costs you in total. For a gift large enough to consume meaningful exemption, that answer is the beginning of a conversation with an estate attorney, not a substitute for one. One final orientation. If your total estate is comfortably below the federal exemption and you live in a state with no estate or inheritance tax, gift tax is largely a filing question rather than a tax one — stay inside the annual exclusion where convenient, file when you exceed it, and keep the returns. If your estate is near or above the exemption, or your state taxes estates at a much lower threshold, gifting becomes a real planning lever and the trade-offs described here are worth working through properly with someone who can see your whole balance sheet.
Frequently asked questions
Who pays gift tax — the giver or the recipient?
The giver. The recipient of a gift owes no federal income tax on it and no gift tax. That surprises people, because it is the opposite of how income works. The only common exception is an arrangement where the recipient agrees to pay the tax as a condition of the gift, which has to be documented.
Do I owe gift tax on every gift above the annual exclusion?
Almost never. Crossing the annual exclusion creates a filing obligation, not a tax bill. The excess is charged against your lifetime exemption — $15 million per person for 2026 — and only gifts beyond that produce an actual payment. The overwhelming majority of Form 709 filings report zero tax due.
Does the annual exclusion apply per person or in total?
Per recipient, per calendar year. You can give $19,000 each to ten different people in 2025 — $190,000 in total — without touching your lifetime exemption or filing anything. That is why splitting a large transfer across recipients and across calendar years is the standard way to move money without paperwork.
Do I have to file Form 709 if no tax is due?
Yes, whenever a gift to any one recipient exceeds that year's annual exclusion, or whenever you elect gift splitting. The return records how much lifetime exemption you have used, which is what the IRS reconciles against your estate later. Skipping it leaves that record unwritten.
How does gift splitting work for married couples?
You elect on Form 709 to treat gifts made by either spouse as made one-half by each. Two annual exclusions then apply to the same gift — $38,000 per recipient for 2025. Both spouses must consent, and the election covers all gifts made that year, not just the one you had in mind.
Are gifts to my spouse taxable?
Not if your spouse is a United States citizen — the marital deduction is unlimited, so you can transfer any amount with no gift tax and no use of exemption. A non-citizen spouse is treated differently, with a separate annual limit that is much larger than the ordinary exclusion but not unlimited.