What is the exclusion amount for gifts in 2023?

The exclusion amount for gifts in 2023 is $17,000 per recipient per year. This means that individuals can give gifts up to this amount to as many recipients as they wish without incurring a gift tax or having to file a gift tax return. The amount is indexed for inflation and increases periodically to account for changes in the cost of living, which is why it differs from previous years.

In a practical context, this exclusion allows individuals to transfer wealth without tax implications, making it an important consideration for estate planning. By keeping track of these annual exclusion amounts, taxpayers can effectively minimize their estate tax liability over time. The current amount of $17,000 provides a significant opportunity for individuals to provide financial support to family members or friends without triggering tax consequences.