A term to know.
The exclusion available each year to each taxpayer for gifts to each beneficiary under Section 2503(b) of the Code. In Revenue Procedure 2021-45, the IRS fixed the gift tax annual exclusion amount at $16,000 for 2022. From an historical perspective, the Tax Reform Act of 1997 tied the then $10,000 gift tax annual exclusion to cost of living adjustments based on increases in the Consumer Price Index. Since 1998, the annual exclusion has increased from $10,000 to $16,000.