Year-End Gifting in Colorado: Using the $19,000 Annual Exclusion Before 31 December

Year-end gifts can help a family member now while reducing what you leave in your estate. In 2026, the federal annual gift tax exclusion is $19,000 per recipient. A Colorado estate planning lawyer can help you decide how a gift fits your plans before 31 December.

The exclusion isn’t a requirement to give money away. Ordinary gifts to family generally don’t give you a federal income tax deduction. Before making a transfer, review what you’ve already given and what you can comfortably afford.

How does the $19,000 annual exclusion work?

The limit applies to each recipient for the entire 2026 calendar year. It isn’t a new allowance for every gift. You could give $19,000 to each of two children without using your lifetime exemption, provided the gifts satisfy the annual exclusion rules.

Add up gifts you’ve already made to the same person. If you gave a daughter $5,000 earlier in 2026, you’d have $14,000 left of that person’s annual exclusion.

The recipient generally must have a current right to use the gift for the exclusion to apply. Gifts to a trust may need special review.

When must you complete the gift?

To use the 2026 annual exclusion, a gift must be completed by 31 December. You can’t carry an unused annual exclusion into the next year.

Give bank transfers time to finish and keep records showing what the person received. A date written on a check doesn’t by itself prove the gift was completed in 2026. Ask how the gift’s timing will be determined before leaving the transfer until the last day.

Can a married couple give $38,000?

Each spouse has an annual exclusion. If you each give $19,000 to the same child, a total of $38,000 can qualify in 2026.

The paperwork can change if one spouse makes the gift and you want to treat it as coming from both. A gift-splitting election requires a gift tax return, even if no tax is due. Confirm how ownership of the money affects the transfer before you move the funds.

What if you give more than $19,000?

Giving someone more than $19,000 doesn’t automatically mean you owe federal gift tax. You generally need to report gifts over that amount to one person on Form 709, unless an exception applies.

Amounts above the annual exclusion can generally use your available lifetime gift and estate tax exemption. For U.S. citizens and residents, the basic lifetime exemption is $15 million in 2026. Taxable gifts using that amount generally leave less available at death.

Gift tax returns for 2026 are generally due 15 April 2027. That filing date is different from the year-end deadline for completing a 2026 gift.

Can you pay tuition or medical bills separately?

Some payments can qualify for separate gift tax exclusions. Tuition you pay directly to a qualifying school can be excluded without using the $19,000 allowance. That tuition rule doesn’t cover books or housing.

Qualifying medical expenses paid directly to the provider may also be excluded. Giving money to a relative who then pays the bill doesn’t qualify for these direct-payment exclusions. A Colorado estate planning lawyer can help check how a particular payment should be handled.

What should you know before giving property?

Cash is usually easier to value than a gift of land or a business interest. For property gifts, the tax value generally depends on fair market value at the time of the gift.

Income tax consequences deserve a separate check. A person who receives appreciated property as a gift generally takes over your tax basis, which is used to calculate a taxable gain. That can lead to a tax bill if the property is later sold.

How can you prepare for year-end gifting?

Start with the people you’d like to help and review this year’s gifts. Keep bank records and written notes about each transfer. A gift should leave enough for your own living expenses and future needs.

Call Beyer & Associates, LLC at (970) 276-8036 to speak with a Colorado estate planning lawyer about your gifting plans. A review can help align your gifts with the rest of your estate plan.