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The annual gift tax exclusion allows an individual to give up to $16,000 to another individual in 2023, without incurring any gift tax or affecting the lifetime exemption.$

The lifetime estate and gift tax exemption is the total amount an individual can give away over their lifetime without incurring estate or gift tax. For 2023, the exemption amount is $12.92 million.$

The unlimited marital deduction allows an individual to give any amount of gifts or bequeath an estate to their spouse free of estate or gift tax.

The federal estate tax rate starts at 18% and can go as high as 40% for taxable estates in 2023, depending on the value of the estate that exceeds the lifetime exemption.

Similar to the estate tax, the federal gift tax rate is progressive and can range from 18% to 40% for gifts that exceed the lifetime exemption amount.

Portability allows a surviving spouse to use any unused portion of their deceased spouse's estate/gift tax exemption, effectively doubling the exemption amount for couples.

The generation-skipping transfer (GST) tax is an additional tax on gifts and bequests that skip a generation, on transfers over the GST exemption amount, which is $12.92 million in 2023.$

Gifts made to qualifying charities are not subject to the gift tax and can reduce the size of an estate, potentially decreasing the estate tax burden.

Gift splitting allows a married couple to combine their annual exclusions to double the amount they can give tax-free to an individual each year, which is $32,000 in 2023.$

The taxable estate is the sum of all the decedent's assets minus allowed deductions, such as debts, funeral expenses, and charitable contributions, at the time of their death.

In 2023, an individual can give up to $175,000 tax-free to a noncitizen spouse; amounts above this threshold will require use of the annual exclusion, lifetime exemption, or incur gift tax.$