Anyone can make a gift to any other person of up to $13,000 per year with no federal gift taxes. A married couple can gift up to $26,000 to one person in any given year. A married couple can also gift $52,000 to another married couple or to two children. For annual gifts within those limits there is little tax planning to do and no gift tax return needs to be filed.
For gifts exceeding the $13,000/26,000 annual exclusion, there is a lifetime unified credit available, which is similar to the estate tax unified credit. Once this unified credit is used up, all gifts above this amount are subject to a gift tax and the filing of a gift tax return. The gift tax is a tax owed by the donor, not the donee. The effects of the gift tax can be as sweeping and devastating as those of the estate tax. For this reason, all larger gifts should be planned carefully to reduce or avoid gift taxes altogether by using special trusts, family limited partnership programs, or many other available tools.