2017 Gift Tax Exclusion
The 2017 Gift Tax Exclusion is $14,000.
Effective 2017-01-01Source: Rev. Proc. 2016-55 (IRS)Verified 2026-09-01
Compared with 2016
Every figure on this page is unchanged from 2016.
| Item | 2016 | 2017 | Change |
|---|---|---|---|
| Annual exclusion per recipient | $14,000 | $14,000 | +$0 (+0.0%) |
Who it applies to
Taxpayers who make gifts to individuals during calendar year 2017
What changed this year, and why
For 2017, the annual gift tax exclusion is $14,000 per recipient. A donor may give up to $14,000 to any one person during calendar year 2017 without the gift counting against the donor's lifetime gift and estate tax exemption. The exclusion covers present-interest gifts only; gifts of future interests in property do not qualify. The exclusion applies separately to each recipient, so a donor who gives $14,000 or less to each of several people owes no gift tax on those transfers. A different, higher exclusion applies to gifts made to a spouse who is not a United States citizen.
Common questions
- Does the annual exclusion apply per donor or per couple?
- The exclusion applies per donor per recipient. Each donor has their own $14,000 annual exclusion for each recipient in 2017, so spouses can each give $14,000 to the same person without reporting a gift.
- Do gifts of future interests qualify for the annual exclusion?
- No. Under Internal Revenue Code section 2503, only present-interest gifts qualify for the annual exclusion.
When a gift needs no return at all
A donor does not have to file Form 709 at all if three conditions are met simultaneously. First, the donor made no gifts to a spouse during the year. Second, the donor did not give more than $14,000 to any single donee. Third, every gift made was of a present interest. A present interest means the recipient had an immediate right to use, possess, and enjoy the property or its income; a gift that defers those rights to a later date is a future interest and does not qualify. There is also a separate shortcut for donors whose only gifts during the year went to qualified charities and who transferred their entire interest in the property to those charities; in that case no return is needed either. If any condition fails - for example, a gift exceeded $14,000, a gift was a future interest, or a gift was made to a spouse (other than a deductible marital deduction transfer) - the donor must file Form 709 and report the gifts, even if no tax is ultimately owed because of exclusions or deductions.
Who does not need to file. If you meet all of the following requirements, you are not required to file Form 709. You made no gifts during the year to your spouse. You did not give more than $14,000 to any one donee. All the gifts you made were of present interests.
2017 Instructions for Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return (IRS)
The gifts the exclusion does not cover
A gift of a future interest is not eligible for the $14,000 annual exclusion at all, so the donor must file Form 709 to report it even when the total value given to that donee during the year is well below $14,000. A present interest exists when the donee has the immediate right to use, possess, and enjoy the property or the income it produces. A future interest, by contrast, is one where the donee's rights to use, possess, or enjoy the property or its income will not begin until some later date - such as reversions, remainders, or similar interests or estates that take effect only after a period of time or a specified event. Because the annual exclusion is limited by law to gifts of present interests, any transfer that defers the recipient's enjoyment simply cannot qualify, regardless of the dollar amount. Donors therefore need to examine the legal nature of what they are giving, not just its value, before concluding that a return can be skipped.
A gift of a future interest cannot be excluded under the annual exclusion. A gift is considered a present interest if the donee has all immediate rights to the use, possession, and enjoyment of the property or income from the property. A gift is considered a future interest if the donee's rights to the use, possession, and enjoyment of the property or income from the property will not begin until some future date.
2017 Instructions for Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return (IRS)
Who actually owes the gift tax
Under the federal gift tax rules, the person who makes the gift - not the person who receives it - is the one who owes any gift tax that may be due. The IRS looks to the donor to file Form 709 and to pay the tax calculated on it. The instructions do, however, name a fallback: if the donor fails to pay, the recipient of the gift can be held liable for the unpaid tax. This is a collection backstop rather than a shift of primary responsibility. The rule also survives the donor's death: when a donor dies before filing a return, the executor of the donor's estate must file the return on the donor's behalf. For practical purposes, the donee does not include the value of a gift in gross income, but should understand that the donor's failure to satisfy the tax obligation could eventually create exposure for the recipient as well.
The donor is responsible for paying the gift tax. However, if the donor does not pay the tax, the person receiving the gift may have to pay the tax. If a donor dies before filing a return, the donor's executor must file the return.
2017 Instructions for Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return (IRS)
Splitting a gift with your spouse
A married couple may not file a single joint gift tax return. Instead, each spouse files his or her own Form 709. If both spouses consent, however, all gifts made by either of them to third parties during the calendar year - including gifts of property held jointly as joint tenants or tenants by the entirety - are treated as having been made one-half by each spouse. To elect this treatment, both returns must be filed together in the same envelope, and the consent requirements must be met: the spouses must have been married to each other at the time of each gift, neither may have been a nonresident not a citizen of the United States at the time of the gift, and if either divorced or became widowed during the year, that spouse must not have remarried before the end of the same calendar year. The effect of the election is that each spouse is treated as having given half of every covered gift, so each can apply his or her own annual exclusion and other deductions to that half.
A married couple may not file a joint gift tax return. However, if after reading the instructions below, you and your spouse agree to split your gifts, you should file both of your individual gift tax returns together (that is, in the same envelope) to help the IRS process the returns and to avoid correspondence from the IRS. If you and your spouse both consent, all gifts (including gifts of property held with your spouse as joint tenants or tenants by the entirety) either of you make to third parties during the calendar year will be considered as made one-half by each of you if all of the following apply. You and your spouse were married to one another at the time of the gift.
2017 Instructions for Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return (IRS)
When the return is due
Gift tax returns are filed on Form 709, which the IRS treats as an annual return. For gifts made during 2017, the donor generally must file the return after January 1 but no later than April 15, 2018 — the year after the year in which the gift was made. If April 15 falls on a Saturday, Sunday, or legal holiday, the deadline shifts to the next business day. Donors cannot file the return early; even if all gift details are known during 2017, the form must wait until the following calendar year begins. A separate rule applies when the donor dies during 2017: the executor must file the decedent's Form 709 by the earlier of the estate tax return due date (including extensions) or the gift tax return deadline. Filing on time matters because elections reported on the return — such as the allocation of the $14,000 annual exclusion per recipient or the use of the lifetime exemption — take effect only when the return is filed within this window.
Form 709 is an annual return. Generally, you must file Form 709 no earlier than January 1, but not later than April 15, of the year after the gift was made.
2017 Instructions for Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Rev. Proc. 2016-55 (IRS)
- Annual exclusion per recipient
(1) For calendar year 2017, the first $14,000 of gifts to any person (other than gifts of future interests in property) are not included in the total amount of taxable gifts under § 2503 made during that year.