Yes - this is true. You may see in IRS publication 950 - http://www.irs.gov/pub/irs-pdf/p950.pdf that the lifetime exclusion from the gift tax is $1,000,000. Any amount above will be taxed with some exceptions to this rule.
You may use this gift tax calculator to estimate your taxes - http://www.accountantsworld.com/taxcalc.aspx?Calc=GiftTaxCalc&page=taxation
California Generation-Skipping tax will be extra - http://www.sco.ca.gov/col/taxinfo/estate/lawreg/lawreg.pdf
Deduction is first $12,000 per year
If you put $10,000,000 gift amount your tentative gift tax will be $4,380,880.
If the gift tax were never paid before Unified Credit will be put automaticaly as $780,800, and final tax due will be $3,600,080.
The gift tax return to be filled is IRS form 709 - http://www.irs.gov/pub/irs-pdf/f709.pdf