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Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 3363
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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Gift tax: assume $5m+ exclusion, annual increases in it and

Customer Question

gift tax: assume $5m+ exclusion, annual increases in it and $14K are all exhausted. How much is the gift tax on each $1.00 after that? Specifically, for each extra $1.00 I give that person, how much do I pay to the IRS?
Submitted: 1 year ago.
Category: Tax
Expert:  Barbara replied 1 year ago.

Under current law (for deaths in 2015), each of us can give away or leave up to $5.43 million without owing federal gift and estate tax. So, for example, if during your life you give your children your house, worth $1 million, plus another $4 million in stocks and bonds, no federal gift tax will be due. The exemption amount is indexed for inflation and goes up each year.

In addition to the $5.43 million exemption, many other gifts are not subject to the gift tax—for example, gifts to a spouse. So if you give your $1 million house and $4 million of other property to your children, and another $7 million to your spouse, you still won’t owe any gift tax.

The current federal gift/estate tax rate is 40%.

Please let me know if you require further information or clarification.

Thank you and best regards,


Customer: replied 1 year ago.
Thanks, ***** ***** aren't answering my question.
How much in tax? 40% of what? If $100,000 is given, does the gifter pay $40,000 of the $100,000 given or a grossed up number (approx $70,000), like compensation?
Expert:  Barbara replied 1 year ago.

40% is the top gift tax rate.

Please see the table on page 18 of the following link:

As you can see from the table, it is a progressive rate ranging from 18% to 40%.

Expert:  Barbara replied 1 year ago.

Just following up with you to see if you have any other questions or concerns. If so, please come back to me here at your convenience. If not, please take a moment to rate my answer since that is the only way I receive credit for answering you and alerts Just Answer to compensate me for a portion of the fee you previously paid.

Best regards,