As of 2002, you can make gifts of up to $11,000 each year, to any number of recipients, without reducing your gift or estate tax exemption. For many years, that number had been $10,000.
Say you have two children, a son- and daughter-in-law, and six grandchildren. You could give each of them up to $11,000 worth of assets per year, $110,000 in all, with no tax consequences. You don’t even have to fill out a gift tax return.
If you’re married, that allowance increases to $22,000 per recipient per year, as long as your spouse formally agrees to go along with the gift. In the above example, you could reduce your taxable estate by up to $220,000 per year.
In addition to gifts up to $11,000 or $22,000 per year, you can use the “med-ed” exclusion. That is, you can make unlimited gifts of tuition and medical payments on behalf of someone else, providing the payments are made directly to the school or health care provider, with no gift tax consequences.
