Gift Capacity Calculator

Formula

To calculate the gift capacity:

\[ \text{GC} = \text{AE} + (2 \times \text{LE}) \]

Where:

$\text{GC}$ is the Gift Capacity ($)
$\text{AE}$ is the Annual Exclusion Amount ($)
$\text{LE}$ is the Lifetime Exclusion Amount ($)

What is Gift Capacity?

Gift capacity refers to the total amount of gifts an individual can give without incurring gift tax liabilities. This is determined by combining the annual exclusion amount and the lifetime exclusion amount. The annual exclusion amount is the maximum value of gifts that can be given to each recipient annually without being subject to gift tax. The lifetime exclusion amount is the total value of gifts that can be given over a person’s lifetime without incurring gift tax. Understanding gift capacity is crucial for estate planning and ensuring that gifts are given in the most tax-efficient manner.

Example Calculation 1

Let's assume the following values:

Annual Exclusion Amount ($\text{AE}$) = $15,000
Lifetime Exclusion Amount ($\text{LE}$) = $11,580,000

Using the formula:

\[ \text{GC} = 15000 + (2 \times 11580000) = 15000 + 23160000 = 23175000 \]

The Gift Capacity is $23,175,000.00.

Example Calculation 2

Let's assume the following values:

Annual Exclusion Amount ($\text{AE}$) = $20,000
Lifetime Exclusion Amount ($\text{LE}$) = $10,000,000

Using the formula:

\[ \text{GC} = 20000 + (2 \times 10000000) = 20000 + 20000000 = 20020000 \]

The Gift Capacity is $20,020,000.00.