Gift Tax Limit 2026 (+ Rules for Gifting Stocks)

Feeling generous and want to give a big gift? Just make sure you’re aware of the tax implications that accompany gifting in the U.S.

If you’re giving a gift, you should know that there’s a limit on how much you can give any one person without having to report it to the Internal Revenue Service (IRS). If you exceed this value, you will need to report the value of the gift to the IRS, and it will count against your annual exclusion and lifetime exemption

Here’s the scoop on the gift tax limit, including annual exclusion and lifetime exemption, so you’re prepared come tax season. Plus, we’ll cover how to report gifts for tax purposes and what happens to taxes when you gift stocks and crypto.

What the IRS considers a ‘gift’

According to IRS.gov, a gift is “any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money’s worth) is not received in return.”

Are all gifts subject to the gift tax?

The IRS says to follow the rule of thumb that any gift is considered a taxable gift. However, there are exceptions.

Gifts below the annual gift exclusion limit for the calendar year do not qualify as taxable (more on the specifics of annual and lifetime exclusion amounts below!).

Additionally, gifts to your U.S.-based spouse or a political organization for its use are not taxable.

Finally, gifts to public charities are not subject to the gift tax. In fact, you can deduct the gift (considered a charitable donation) from your taxable income, up to half of your annual adjusted gross income for the year.

Public charities include organizations like churches, hospitals, certain organizations affiliated with hospitals, and educational institutions like schools and colleges. Be sure to get a tax receipt from the charity you donate to.

What can trigger a gift tax return?

It’s important to consider the value of any gift you give, which the IRS defines as anything you give with monetary value in which you expect nothing in return. This includes large gifts to your kids, all-expenses-paid vacations to friends, and more. Generally, the gift giver pays taxes on the value of the asset.

There are ways to get around the gift tax. If a gift to an individual stays below the annual limit, you won’t be hit with a gift tax on it, and it won’t be deducted from your lifetime gift tax exemption amount.

Gift tax rates in 2026

Annual gift tax exclusion

The annual gift tax exclusion for 2026 is $19,000 per recipient (unchanged from 2025). This means any gifts with a fair market value of $19,000 or less are not taxable. However, any gifts with a fair market value exceeding $19,000 are subject to the gift tax.

Lifetime gift tax exemption

The lifetime gift tax exemption for 2026 is $15 million per individual ($30 million for couples). Gifts exceeding the annual exclusion reduce this amount before any 40% tax applies. You may consult IRS Publication 559 or a tax advisor for your situation.

How stock & crypto gifts are taxed

Gift givers of stock and cryptocurrency may need to report gifts if the value exceeds the annual federal gift tax exclusion. The IRS generally determines the value of the gift based on the fair market value of the asset on the date it is gifted.

A recipient of gifted stock or cryptocurrency may owe capital gains taxes if they later sell the asset. The tax is generally based on the difference between the sale price and the applicable cost basis of the asset.

If the holding period qualifies as long-term, capital gains on most investments are generally taxed at 0%, 15%, or 20%, depending on taxable income. Assets sold after being held for one year or less are typically taxed at short-term capital gains rates, which generally follow ordinary income tax rates.

In some cases, higher-income taxpayers may also be subject to the 3.8% Net Investment Income Tax (NIIT).

These capital gains rules generally apply when a capital asset is sold, whether the asset was purchased directly or received as a gift.

When paying taxes after the sale, the gift recipient will need to know three things:

1. Cost basis: For gifted assets, the cost basis is often based on the original owner’s adjusted basis in the asset, although different rules may apply depending on the asset’s fair market value at the time of the gift. Documentation from the original owner or brokerage account records may help establish this information.

On Public.com, you can make quick changes to your investing portfolio thanks to features like Debit Card Funding and Instant Withdrawals. While the market changes quickly, this gives you better control over your cost basis for any particular stocks, crypto, or other market-based assets.

2. Fair market value (FMV) at the time of the gift: This refers to the market price of the asset on the date it was transferred to the recipient. For example, if a stock was purchased earlier but gifted at a later date, the FMV would generally be the market price on the date of the gift.

3. Holding period: The holding period determines whether gains are treated as short-term or long-term. In many gift cases, the recipient’s holding period may include the original owner’s holding period, depending on how the cost basis is determined.

This information may often be available through brokerage account records associated with the original purchase. Keeping documentation of the purchase date, cost basis, and gift date may help provide context for future tax reporting.

How to report and pay the gift tax

Gifts that exceed the annual exclusion amount are generally reported using IRS Form 709 (United States Gift and Generation-Skipping Transfer Tax Return). This form is typically filed separately from your individual income tax return, though it is due on the same filing deadline.

In many cases, filing Form 709 reports the gift and applies part of the giver’s lifetime gift and estate tax exemption, rather than resulting in an immediate tax payment.

Want to know how gifting might impact your tax bill? Use our capital gains tax calculator to get an estimate of the potential tax consequences

Bottom line on the gift tax limit

There are ways around the gift tax, so it’s important to be aware of the potential tax consequences so you can avoid paying taxes on gifts if possible. This includes any gift with monetary value in which you expect nothing in return, from cars and vacations to stocks and crypto.

If you’re still unsure whether you owe gift taxes, consult with a tax professional or financial advisor for any questions regarding gifts you’ve given over the course of the tax year.