Your client does not live in a community property state and does not elect gift splitting. This year, she made the following gifts of separate property: $53,000 to her son to help buy a house, $60,000 to her spouse for a boat, $40,000 to her church as a donation, $75,000 (current market value) of jewelry to her daughter (cost basis of $24,000). What is the amount of her taxable gifts for 2026?

Your client does not live in a community property state and does not elect gift splitting. This year, she made the following gifts of separate property: $53,000 to her son to help buy a house, $60,000 to her spouse for a boat, $40,000 to her church as a donation, $75,000 (current market value) of jewelry to her daughter (cost basis of $24,000). What is the amount of her taxable gifts for 2026?

• A. $53,000
• B. $75,000
• C. $90,000
• D. $128,000

Answer: (C)

The key idea is how taxable gifts are determined using the annual exclusion. Gifts to individuals that exceed the per-recipient annual exclusion for the year are taxable gifts; gifts to charities or to a spouse (assuming a citizen spouse) are not counted toward gift tax. For 2026, the annual exclusion per recipient is 19,000. Since she does not live in a community property state and does not elect gift splitting, each gift to an individual is considered separately and cannot be doubled by splitting. - Gift to her son: 53,000 minus 19,000 exclusion equals 34,000 taxable. - Gift to her daughter: 75,000 minus 19,000 exclusion equals 56,000 taxable. - Gift to her spouse: is covered by the unlimited marital deduction (assuming a U.S. citizen spouse), so not taxable. - Gift to the church: gifts to qualified charities aren’t subject to gift tax. Add the two taxable gifts: 34,000 + 56,000 = 90,000. The jewelry’s cost basis doesn’t affect gift tax, and the charitable gift is not treated as a taxable gift. Therefore, the taxable gifts for 2026 total 90,000.

The key idea is how taxable gifts are determined using the annual exclusion. Gifts to individuals that exceed the per-recipient annual exclusion for the year are taxable gifts; gifts to charities or to a spouse (assuming a citizen spouse) are not counted toward gift tax.

For 2026, the annual exclusion per recipient is 19,000. Since she does not live in a community property state and does not elect gift splitting, each gift to an individual is considered separately and cannot be doubled by splitting.

• Gift to her son: 53,000 minus 19,000 exclusion equals 34,000 taxable.

• Gift to her daughter: 75,000 minus 19,000 exclusion equals 56,000 taxable.

• Gift to her spouse: is covered by the unlimited marital deduction (assuming a U.S. citizen spouse), so not taxable.

• Gift to the church: gifts to qualified charities aren’t subject to gift tax.

Add the two taxable gifts: 34,000 + 56,000 = 90,000.

The jewelry’s cost basis doesn’t affect gift tax, and the charitable gift is not treated as a taxable gift. Therefore, the taxable gifts for 2026 total 90,000.