Definitions for "Gift tax annual exclusion"
a provision of the federal gift tax law that exempts up to $11,000 per year (for 2002-2004, indexed for later years) per donee from the gift tax, provided the gift is of a present interest in property
In 2004 federal tax laws allow a single donor to exclude $11,000 of a gift from gift tax liability if the gift is of a present interest to a specific individual donee. For married couples the annual gift tax exclusion amount is $22,000 if the gift is to a third party. A present interest gift is one of which the donee has an immediate unrestricted right of use, benefit, and enjoyment.
The provision in the tax law that exempts from federal gift taxes the first $12,000 (as adjusted for inflation) in present-interest gifts a person gives to each recipient during a year.