What This Calculator Does
You want to give your daughter $50,000 for a down payment. Will you owe gift tax? The short answer is almost certainly no, but you will need to file a form. This calculator shows exactly how much of your gift is excluded, how much counts against your lifetime exemption, and whether any actual tax is due. It uses the 2026 annual exclusion of $19,000 per recipient and the $15 million lifetime exemption.
Enter the gift amount per recipient, the number of recipients, and any prior lifetime taxable gifts you have already made. The tool returns the total gift, the annual exclusion applied, the taxable gift, the tax owed, the exemption consumed, and your remaining lifetime exemption. Most users will see $0 in tax owed, because the lifetime exemption is so large that it absorbs nearly every gift.
According to the IRS gift tax FAQ, the 2026 annual exclusion remains $19,000 per recipient, unchanged from 2025 because the inflation adjustment did not cross the next $1,000 rounding threshold. The lifetime exemption rose to $15 million per individual under the Working Families Tax Cuts Bill signed in July 2025.
Inputs Required
- Gift Amount Per Recipient: The total value given to each person this calendar year.
- Number of Recipients: How many people receive the gift. The annual exclusion applies separately to each.
- Prior Lifetime Exemption Used: The total taxable gifts you have already made in your lifetime that consumed your exemption.
Outputs Provided
- Total Gift Amount: Gift per recipient multiplied by the number of recipients
- Annual Exclusion Applied: The $19,000 per recipient that is excluded entirely
- Taxable Gift: The amount above the annual exclusion that counts against your exemption
- Gift Tax Owed: The actual tax due, usually $0 until you exceed the lifetime exemption
- Exemption Used: How much of your $15 million lifetime exemption this gift consumes
- Remaining Lifetime Exemption: What is left for future gifts and your estate
How the Calculation Works
Gift tax has two layers of protection before any tax is owed. First, the annual exclusion shields the first $19,000 given to each recipient each year. Second, the lifetime exemption shields the next $15 million of cumulative taxable gifts across your entire life. Only gifts beyond both thresholds face the progressive gift tax rates, which top out at 40%.
Total Gift = Gift Per Recipient x Number of Recipients
Excluded = min(Gift, $19,000) x Number of Recipients
Taxable Gift = max(0, Total Gift - Excluded)
Cumulative Taxable = Prior Exemption Used + Taxable Gift
If Cumulative Taxable <= $15,000,000: Tax Owed = $0
Else: Tax Owed = Tax(Cumulative Taxable) - Tax($15,000,000)
For the $50,000 gift to one recipient: the annual exclusion covers $19,000, leaving a taxable gift of $31,000. With no prior taxable gifts, cumulative taxable gifts are $31,000, well under the $15 million exemption. Tax owed is $0, but $31,000 of the lifetime exemption is consumed, leaving $14,969,000 for future gifts and the estate. You must file Form 709 to report the taxable gift even though no tax is due.
The progressive rate table starts at 18% on the first $10,000 of taxable gifts and rises to 40% on amounts above $1 million. Because the lifetime exemption is so large, most people never reach the point where these rates apply. The rates matter mainly for ultra-high-net-worth gifting above $15 million.
How to Use the Calculator
- Enter the gift amount per recipient. This is the total you plan to give each person this calendar year.
- Enter the number of recipients. The annual exclusion applies separately to each one.
- Enter your prior lifetime exemption used, if any. This is the sum of all taxable gifts you have reported on past Form 709 filings.
- Read the tax owed and exemption used. Most results will show $0 tax with some exemption consumed.
- File Form 709 if your gift to any one recipient exceeds $19,000.
Example Calculations
Example 1: A $50,000 Down Payment Gift
Robert gives his daughter $50,000 for a house down payment. The annual exclusion covers $19,000, leaving a taxable gift of $31,000. He has made no prior taxable gifts. Tax owed is $0 because his cumulative taxable gifts of $31,000 are far below the $15 million exemption. He files Form 709 to report the gift, and his remaining lifetime exemption drops to $14,969,000. No money changes hands with the IRS.
Example 2: A Married Couple Giving to Three Children
A married couple wants to give each of their three children $100,000 this year. Each spouse can use the $19,000 annual exclusion per recipient, so together they can exclude $38,000 per child. The taxable gift per child is $62,000, and across three children the total taxable gift is $186,000. Split between the two spouses, each reports $93,000 in taxable gifts on their own Form 709. Tax owed is $0 for both, and each uses $93,000 of their $15 million exemption. This is a common wealth-transfer strategy called gift splitting.
Real World Scenarios
Annual Gifting to Shrink an Estate
A couple with three children gives each child $38,000 per year ($19,000 from each parent). That is $114,000 per year moving out of their estate with no tax and no exemption use. Over 20 years, they transfer $2.28 million plus any growth on those gifts. If the gifts are invested at 7%, the children's accounts grow to roughly $4.7 million, all outside the parents' estate. This is one of the simplest estate planning moves available. Pair this with our Estate Tax Calculator to see the impact.
A Large Gift That Consumes Exemption
A business owner gifts $2 million of company stock to a trust for her children. The annual exclusion is negligible against this size. The taxable gift is about $1,981,000. Tax owed is still $0 because her lifetime exemption of $15 million covers it. She files Form 709, and her remaining exemption drops to about $13,019,000. She has moved a large asset plus all its future appreciation out of her estate without paying any gift tax.
Exceeding the Lifetime Exemption
A wealthy individual has already used $14.5 million of her lifetime exemption. She makes a $2 million taxable gift. Her cumulative taxable gifts become $16.5 million, which is $1.5 million above the $15 million exemption. The tax on $16.5 million under the rate table is about $6,605,800, and the tax on $15 million is about $5,845,800. The difference, roughly $760,000, is owed as gift tax. This is the rare case where gift tax is actually paid.
Common Mistakes to Avoid
- Not filing Form 709: You must file a gift tax return for any gift above $19,000 to a single recipient in 2026, even if no tax is owed. Failing to file can extend the IRS statute of limitations indefinitely on your entire estate.
- Forgetting gift splitting: A married couple can elect to split gifts on Form 709, treating a gift from one spouse as coming half from each. This doubles the annual exclusion to $38,000 per recipient. Both spouses must file.
- Overlooking the educational and medical exclusions: Tuition paid directly to a school and medical bills paid directly to a provider are excluded entirely, with no dollar limit and no Form 709. These do not count against the annual exclusion or the lifetime exemption.
- Gifting appreciated assets without considering basis: The recipient takes your cost basis, not the fair market value. If you gift stock worth $100,000 that you bought for $20,000, the recipient will owe capital gains tax on the $80,000 gain when they sell. Sometimes it is better to bequeath, since inherited assets get a step-up in basis.
Limitations of This Calculator
This tool calculates federal gift tax for cash gifts using the 2026 annual exclusion and lifetime exemption. It does not handle non-cash gifts, which require a fair market valuation and may have basis and depreciation recapture consequences. It does not model gift splitting between spouses, the unlimited marital deduction for gifts to a U.S. citizen spouse, or the higher $194,000 annual exclusion for gifts to a non-citizen spouse. State-level estate or inheritance taxes are not included. The progressive rate calculation is an approximation for gifts above the lifetime exemption. For large or complex gifts, consult an estate planning attorney or CPA.
Authoritative Research and Resources
- IRS: Frequently Asked Questions on Gift Taxes - The official IRS guide covering the annual exclusion, lifetime exemption, Form 709 filing requirements, and the educational and medical exclusions.
- IRS Form 709: United States Gift (and Generation-Skipping Transfer) Tax Return - The form you must file to report taxable gifts, with instructions on gift splitting and the annual exclusion.
For related tools, estimate estate tax with our Estate Tax Calculator, check capital gains on gifted assets with our Capital Gains Tax Calculator, or find your income tax bracket with our Tax Bracket Calculator.