I Want to Give Money to My Son and His Wife. How Much Can I Give Without Triggering Taxes?

Let’s say that you would like to give money to your son and his wife. How much can you give them without triggering the gift tax? There are two answers to that. First, each year you can give them up to $19,000 without reporting the gift to the IRS. Second, in addition to this annual giving, you can give them up to $13.99 million over the course of your lifetime without paying taxes. These numbers represent the 2025 limits. Here’s what to know and how it might change over time.

For help managing estates or gifting, consider working with a financial advisor.

What Is the Gift and Estate Tax?

The gift and estate taxes apply to all unilateral transfers.

A unilateral transfer is defined as any money or value that you give in exchange for nothing, or that you give in exchange for reduced value. For example, say that you sell your son and his wife a house worth $500,000 for $100. This would be a gift in the amount of $499,900 (the difference in value). Or, if you give them $100,000 free and clear, it would be a gift of $100,000.

The recipient does not pay the gift tax. It is paid by the person making the gift or by the estate in question. A gift giver typically reports potentially taxable gifts using IRS Form 709.

The gifts and estate tax is applied on a progressive scale, with brackets that range between 18% for taxable transfers under $10,000 and 40% at the high end for taxable transfers over $1 million. However, while the brackets for this tax are relatively high, most households do not pay the gift or estate tax. This is because of the tax’s high exclusion thresholds.

What Are the Exclusion Thresholds?

The gift tax has an annual exclusion and a lifetime exemption (the difference in terminology has little significance in this context). Gifts under these caps are tax-free.

The annual exclusion is the amount of money you can give to each recipient each year without reporting it on your taxes. In 2025, it’s set at $19,000. So, for example, you could give your son $19,000 without reporting it on your taxes. Then you could give his wife another $19,000, again, without reporting it on your taxes.

The annual exclusion applies independently each year. This means that you can give up to the exclusion each year regardless of any past year’s giving.

The lifetime exemption is the amount you can give away over the course of your lifetime without paying taxes. Each year, if you give away money in excess of your annual exclusions, you report the excess to the IRS. This reported amount is deducted from your lifetime exemption. Eventually, if you report a gift in excess of your remaining lifetime exemption, you are taxed on the remainder. In 2025, the lifetime exemption is set at $13.99 million. The lifetime exclusion applies per donor, meaning that it applies cumulatively to all of your giving regardless of recipients.

The lifetime exemption is cumulative. This means that each reduction to your remaining exemption amount is permanent. However, even if you have exhausted your lifetime exemption, you can continue to give untaxed gifts up to each year’s annual exemption. Both the annual exclusion and the lifetime exemption are increased each year to keep up with inflation.

The lifetime exemption was significantly increased by the 2017 Tax Cuts and Jobs Act. This provision is scheduled to sunset at the end of 2025, after which the lifetime exemption will fall by roughly half. Previous giving would be unaffected, but any future giving and estate transfers would need to account for a significantly reduced cap. The current Republican majority in Congress and the Trump Administration has said that it will extend this tax cut, which would maintain gift tax exemptions at their current level. However, if the Tax Cuts and Jobs Act does expire, 2025 will be a better year to make any particularly large transfers.

A financial advisor could help you determine how any changes to the Tax Cuts and Jobs Act could affect your financial situation.

How Much Money Can You Give?

The maximum amount of money that you can give your son and his wife in a single year is that year’s annual exclusion, plus your remaining lifetime exemption. In 2025 those numbers would be:

Maximum unreported gift to your son: $19,000
Maximum unreported gift to his wife: $19,000
Lifetime exemption: $13.99 million
Total: $19,000 + $19,000 + $13.99 million = $14,028,000

If you have a spouse, they could also make the same amount of untaxed gifts. This would theoretically double your household’s eligible giving to $28,056,000.

In addition, each year you can continue to give unreported gifts to your son and his wife up to that year’s annual exclusion. You can also give reported gifts each year up to that year’s lifetime exemption increase, even if you have exhausted your lifetime exemption. For example, say that in 2026 the annual exclusion increases to $20,000 and the lifetime exemption increases by $280,000, roughly 2%, to $14.27 million. (This is entirely speculative for the sake of demonstration. We have no information on the 2026 tax levels.)

With these assumptions in place, this year and next year you could give:

Maximum 2025 unreported gift to your son: $19,000
Maximum 2025 unreported gift to his wife: $19,000
Lifetime exemption: $13.99 million
Maximum 2026 unreported gift to your son: $20,000
Maximum unreported gift to his wife: $20,000
Lifetime exemption increase: $280,000
Total: $19,000 + $19,000 + $13.99 million + $20,000 + $20,000 + $280,000 = $14,348,000

Again, if you have a spouse they could also supplement your giving, potentially doubling this amount.

This example demonstrates how the rules work to determine how to best maximize your gifts to your son and his wife. Now it is up to you to tailor these rules to your own personal goals and circumstances. Remember, a financial advisor can help you navigate the situation and execute an appropriate strategy.

Bottom Line

The gift tax only applies to households that have given away more than $14 million in total giving. Each year you can give away up to that year’s annual exclusion, then you can also give away up to your lifetime exemption before this tax applies.

Tips on Managing Gifts

If you are giving a large gift, it’s very important to manage and minimize your taxes. Although it has very high exemptions, once the gift tax does kick in those brackets can climb fast. So, let’s look at how you can minimize your taxes while you give a monetary gift.
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