Can I gift my son $500,000?

Yes, you can gift your son $500,000, but only the first $19,000 falls under the 2026 annual gift tax exclusion; the remaining amount counts against your lifetime federal gift and estate tax exemption and must be reported to the IRS.

Here is how it works in practice. The IRS allows each taxpayer to give up to $19,000 per recipient per year (2026 figures) without any reporting requirement or exemption impact. On a $500,000 gift to your son, that leaves $481,000 as a taxable gift for reporting purposes. You will need to file IRS Form 709 for the year the gift is made, but filing does not mean writing a check to the IRS. The $481,000 simply reduces your lifetime exemption, which is $15 million per individual (or $30 million for a married couple electing to split gifts). Unless your total lifetime gifts plus your taxable estate eventually exceed that threshold, no federal gift tax is actually owed; you are just using up part of your exemption.

If you are married, you and your spouse can elect to split the gift, applying two annual exclusions ($38,000 total) and dividing the taxable remainder between both of your exemptions, which requires both spouses to file Form 709.

A few points worth confirming with a professional before you file:

• Whether a formal valuation is needed, which matters more for gifts of business interests, real estate, or other hard-to-price assets than for straight cash.
• Whether your state imposes its own estate or inheritance tax with a lower threshold than the federal exemption.
• Whether structuring the gift over multiple years could reduce the amount that taps your lifetime exemption.

For gifts involving a business interest, minority stake, or other non-cash asset, an accurate valuation is essential to support the figures reported on Form 709. Our gift tax appraisal services prepare USPAP-compliant valuations designed to hold up under IRS review, so you can file with confidence.