How much money can you gift each year to avoid inheritance tax?

For 2026, you can gift up to $19,000 per recipient each year (or $38,000 if you're married and splitting gifts with your spouse) without owing federal gift tax or touching your lifetime estate and gift tax exemption. This annual exclusion applies separately to each person you give to, so there's no cap on the number of recipients, only on the amount each one can receive tax-free in a given year.

Gifts that stay within the annual exclusion don't need to be reported to the IRS and don't reduce your lifetime exemption (currently $15 million per individual, $30 million for married couples in 2026). Once a gift to any single person exceeds $19,000 in a year, the excess counts against your lifetime exemption and generally requires filing a gift tax return (Form 709), even though no actual tax is usually owed until that lifetime exemption is exhausted. A different rule applies to gifts made to a spouse who is not a U.S. citizen, where a separate, higher annual limit applies.

Where this gets complicated is valuation. The exclusion is straightforward for cash, but gifts of a business interest, real estate, or other non-cash property need a defensible fair market value determination to support the amount reported (or not reported) on Form 709. A USPAP-compliant gift tax valuation documents that value with the methodology and market analysis needed to hold up under IRS review.

Because annual exclusion amounts and lifetime exemptions are set by federal law and subject to change, and because state-level estate or inheritance taxes can differ from the federal rules, it's worth confirming your specific numbers with a tax professional before making large gifts.

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