The annual gift tax exclusion applies per donee, not per donor.

• A. True
• B. False
• C. Only applies to gifts of present interest.
• D. Only applies to gifts to family members.

Answer: (A)

The main idea here is that the annual gift tax exclusion is tied to the recipient in a given year. For each donee, a donor can give up to the exclusion amount without triggering gift tax. If more than one person gives to the same recipient, each donor can use their own exclusion for that person in the same year. So, while the same recipient can receive multiple tax-free gifts from different donors, the limit is applied to each donor–donee pairing, which means the notion of an exclusion that centers on the donee is correct in practice.

This isn’t limited to gifts of present interest, and it isn’t restricted to family members—the exclusion covers gifts of both present and future interests to any donee, and applies regardless of relationship.