The $19,000 annual exclusion
The first $19,000 of gifts you make to any one person in 2026 is excluded from taxable gifts, and the exclusion is separate for each person you give to. The amount is set by the IRS annual inflation procedure and appears in Rev. Proc. 2025-32, as printed in Internal Revenue Bulletin 2025-45, verified and kept on record.
The exclusion only covers gifts of a present interest - a gift the recipient can use now. A future interest, such as a remainder that vests later, does not qualify, so its full value can enter taxable gifts even when the amount is below $19,000.
The page subtracts the exclusion from the gift it is given and never below zero: an $18,000 gift produces $0 of taxable gifts and a $19,000 gift produces $0 as well, because the exclusion is capped at the value of the gift. A gift of $0 also yields $0 of taxable gifts, though the table still prints the annual exclusion row at $19,000 - a presentation quirk, not a deduction from an imaginary gift.
The $15,000,000 lifetime exemption, then 40%
Taxable gifts accumulate over a lifetime. For 2026 the basic exclusion against gift and estate tax is $15,000,000, and the credit that goes with it exactly offsets the tax on that amount - so cumulative taxable gifts up to the exclusion cost nothing and every dollar above it is taxed at 40%.
The page shows the tax the current gift adds rather than the whole bill: the gift tax on all lifetime taxable gifts minus the gift tax on the ones made before this year. If prior gifts already exhausted the exemption, the full taxable portion of this gift is taxed at 40%; if this gift is the one that crosses the line, only the part above the exclusion is.
The cumulative figure decides whether the exemption is used up, not the tax this gift adds. At extreme inputs the added tax can round to $0 while the cumulative total still sits above $15,000,000, and the note says so: the exemption is gone and every further taxable dollar is taxed at 40%.
Splitting a gift with your spouse
A married couple can elect on Form 709 to treat a gift made by either spouse as made half by each. Each spouse then applies their own $19,000 annual exclusion and draws on their own lifetime exclusion, which can keep a larger gift out of taxable territory.
The calculator prices your side of the split: half the gift is treated as yours, your $19,000 exclusion comes off that half, and the remainder is added to your prior taxable gifts. Splitting a $100,000 gift therefore leaves $31,000 taxable on your side, against $81,000 if the same gift were not split.
The spouse half is not shown and is not subtracted from your cumulative total; it uses their exclusion and their exemption on their own return. The table prints the annual exclusion once at $19,000 even in a split, applied to your share, which is why the share row and the exclusion row have to be read together.
Who pays, and what gets filed
The donor pays the gift tax, not the person who receives the gift. Taxable gifts and many larger nontaxable ones go on Form 709, due with the donor income tax return by April 15, with extensions available, and prior years taxable gifts are carried forward from old returns.
Because taxable gifts use up the same lifetime exclusion the estate tax draws on at death, the two calculators share the $15,000,000 figure and the 40% rate. A gift that costs nothing today is still spending exemption that will not be there at death, which is the trade the page makes visible without recommending either side of it.
The page does not saturate its outputs and does not warn when a cumulative total runs past the page money ceiling; it keeps adding the inputs you give it. Federal only, 2026 only, and no state gift tax is modeled.
Danfio