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Gift tax compliance and planning

TCP Chapter 3 · Area I · Blueprint I.C

The gift tax and the estate tax are one system: a single lifetime exemption, $15 million per person for 2026 under OBBBA, covers taxable gifts made during life and the estate at death. Most gifts never produce tax, but many still require Form 709, and every gift uses or protects part of that exemption. This chapter covers what a gift is, the $19,000 annual exclusion, present and future interests, Crummey powers, gift splitting, the marital and charitable deductions, the cumulative computation with the unified credit, valuation, and the planning question the Blueprint asks: which property should a client give to shrink the future estate? Tessa and Leo advise Harold and June Whitfield, who want to help their children and grandchildren. Figures are for 2026.

In this chapter

  1. What a gift is and when Form 709 is required
  2. The annual exclusion, future interests and Crummey powers
  3. Gift splitting between spouses
  4. The marital and charitable deductions
  5. Computing taxable gifts and the gift tax
  6. Valuing gifts and the donee's basis
  7. Choosing which property to give
  8. Trusts and other gifting tools

This chapter has 8 lessons, 50 practice MCQs with explanations and 20 simulations, plus flashcards and a recall sheet.

What this chapter covers

Chapter 2: Passive activity and at-risk limits · Chapter 4: Personal financial planning