📚 Glossary

Annual Gift Tax Exclusion

The amount you can give to any one person in a calendar year without having to report the gift or use any of your lifetime exemption. For 2024, this a...

Lifetime Gift and Estate Tax Exemption

The total amount you can transfer during your lifetime or at death without paying federal gift or estate tax. For 2024, this unified exemption is $13....

Form 709

The IRS form used to report taxable gifts and allocate Generation-Skipping Transfer (GST) tax exemption. Required when gifts to any individual exceed ...

Gift Splitting

An election that allows married couples to treat a gift made by one spouse as if each spouse made half. This effectively doubles the annual exclusion ...

Unified Credit

The tax credit that offsets gift and estate taxes, based on the lifetime exemption amount. For 2024, the unified credit eliminates tax on the first $1...

Present Interest

A gift that gives the recipient an immediate right to use, possess, or enjoy the property. Only gifts of present interest qualify for the annual exclu...

Future Interest

A gift where the recipient cannot immediately use or enjoy the property. Future interest gifts do not qualify for the annual exclusion and must be rep...

Crummey Power

A provision in a trust that gives beneficiaries a temporary right to withdraw contributions, converting future interest gifts into present interest gi...

Generation-Skipping Transfer Tax

An additional tax on transfers to grandchildren or other skip persons that bypass a generation. The GST exemption mirrors the lifetime gift exemption ...

Fair Market Value (FMV)

The price at which property would change hands between a willing buyer and willing seller, with both having reasonable knowledge of relevant facts. Us...

Marital Deduction

An unlimited deduction for gifts or bequests to a U.S. citizen spouse. Transfers qualifying for the marital deduction are not subject to gift or estat...

Qualified Transfer

Payments made directly to educational institutions for tuition or to medical providers for medical care that are exempt from gift tax, regardless of a...

Donor

The person who makes a gift. The donor is responsible for filing Form 709 and paying any gift tax due if the lifetime exemption is exceeded.

Donee

The person who receives a gift. The donee generally does not pay gift tax or need to report the gift as income.

Taxable Gift

The portion of a gift exceeding the annual exclusion that must be reported on Form 709 and counts against the lifetime exemption.