A widower wants to gift as much as possible to his three children without making taxable gifts and without using any of his applicable credit. What is the total amount he can give in 2022?

A widower wants to gift as much as possible to his three children without making taxable gifts and without using any of his applicable credit. What is the total amount he can give in 2022?

• A. $16,000
• B. $80,000
• C. $48,000
• D. $64,000

Answer: (C)

The main idea is the annual gift tax exclusion, which lets you give a certain amount to each person every year without any gift tax and without dipping into your lifetime credit. For 2022, that exclusion is 16,000 dollars per recipient. If the donor has three children and wants to stay entirely within that exclusion and not use any of the lifetime (unified) credit, he can give 16,000 to each child, totaling 16,000 × 3 = 48,000 dollars. So the maximum amount he can gift in 2022 without taxable gifts or using the applicable credit is 48,000 dollars. Gifts beyond 16,000 to any one child would count against his lifetime exemption, which he wants to avoid.

The main idea is the annual gift tax exclusion, which lets you give a certain amount to each person every year without any gift tax and without dipping into your lifetime credit. For 2022, that exclusion is 16,000 dollars per recipient. If the donor has three children and wants to stay entirely within that exclusion and not use any of the lifetime (unified) credit, he can give 16,000 to each child, totaling 16,000 × 3 = 48,000 dollars.

So the maximum amount he can gift in 2022 without taxable gifts or using the applicable credit is 48,000 dollars. Gifts beyond 16,000 to any one child would count against his lifetime exemption, which he wants to avoid.