Georgia Gift Tax: What You Need To Know

When it comes down to considering how to pass down wealth, it’s worthwhile to think about the potential impact of gift taxes on your long-term plans. Whether you’re making small, regular gifts or transferring large sums, a basic understanding of these potential tax obligations helps protect your financial future and that of your loved ones.

In this article, we’ll break down the key factors for Georgia residents and explain how both federal and state rules apply to gifts. You’ll also discover how different gifting strategies can fit into your broader financial planning, along with tips for finding expert guidance if you need it.

What Exactly is a Gift Tax?

When you give someone money, property, or other assets without receiving equal value in return, you may trigger the federal gift tax. This can apply to anything from cash and stocks to real estate or high-value personal belongings. 

Every calendar year, the IRS establishes a maximum gift amount that can be given to any one individual without triggering the requirement to file a gift tax return. Gifts below that threshold don’t need to be reported and don’t count against your lifetime exemption.

However, if the value of a gift goes over the annual limit, it must be disclosed using a gift tax return—even though you might not owe any taxes right away. Whether or not you ultimately pay depends on how much of your lifetime exemption you’ve already used. 

Additionally, depending on your location, a state-level gift tax may also apply, adding another layer of complexity. Knowing the rules in advance can help you give thoughtfully without unintended tax consequences.

Does Georgia Have a Gift Tax?

Many people wonder if Georgia imposes its tax on gifts, separate from the federal system. At present, the state does not require any payment for transferring assets between individuals. That means you can hand over money, property, or other valuable items without a state-imposed tax. 

With that being said, the absence of a Georgia-specific requirement doesn’t eliminate federal oversight. When you go above federal limits, you might have to file paperwork or account for the value of those gifts as part of your overall lifetime totals. 

Please Note: Connecticut is the only state that levies a gift tax at the state level.1

How Federal Gift Tax Rules Impact Georgia Residents

Although Georgians do not contend with a dedicated state tax, federal regulations remain important. The government sets out clear parameters for what can be transferred each year, how those transfers are calculated, and what happens if you go past certain marks. Being mindful of these considerations can help you avoid unwanted tax surprises later.

Understanding the Annual Gift and Estate Tax Exemption

Every calendar year, you’re allowed to give up to a specific sum to any individual without immediately affecting your broader exemption. This limit is known as the annual gift tax exclusion. 

You can distribute that amount to any number of recipients, and your spouse can do the same if you’re married. If one person receives more than the allowed amount in the same year, the surplus will be counted against their lifetime total.

Please Note: For 2025, the annual gift and estate tax exemption is $19,000 per recipient.2

What About the Lifetime Gift and Estate Tax Exemption?

In addition to the yearly cap (i.e., the annual exclusion), there is an overall limit to combining gifts during your lifetime and what remains in your estate at death. If you stay under that limit, no tax is levied on the transfers. However, if you surpass it, you may encounter a gift tax rate on the excess. 

Individuals with higher net worths should closely track their total gifts. By being strategic, you can reduce the taxable portion of your estate and possibly sidestep additional levies in the future. On the other hand, ignoring these thresholds could mean you eventually have to pay the federal government once the sum of your lifetime gifts and estate goes beyond the allowable range.

Please Note: For 2025, the lifetime estate and gift tax exemption is $13.99 million for a given individual.3 That said, under current law, the estate tax exemption—expanded under the Tax Cuts and Jobs Act (TCJA)—is set to roll back in 2026, shrinking to inflation-adjusted pre-2018 levels, around $7 million for individuals and $14 million for married couples.4 This change may significantly impact tax planning and estate strategies. However, legislation in the very near future could still alter these thresholds before the scheduled reversion takes effect.

Breaking Down Gifts to Family Members

Families often use gifting as a tool to share resources with future generations. Whether you’re handing cash to children for day-to-day help or passing substantial assets to a spouse, different regulations govern how these gifts are viewed.

Transfers between spouses who are both U.S. citizens are generally unlimited. You can give large amounts without affecting your remaining exemption. If your spouse is not a citizen, annual caps apply before needing to report anything above the limit. For 2025, the amount is capped at $190,000 for spouses who are not U.S. citizens.

Parents may give money or property to help with education, living costs, or major milestones. If the total to any one child stays under the annual exclusion for that year, there’s no reduction in the lifetime allowance. If it goes above, that amount must be tallied up against your overall buffer. In 2025, parents can give up to $19,000 per child without having to deal with federal gift taxes.

Tax Considerations When Gifting to Charities

Charitable giving doesn’t just support organizations you admire—it can also provide a reduction to your personal tax liability. In Georgia, you won’t pay a separate tax for donating assets, but you might see benefits on your federal return if you itemize deductions. Whether you offer cash, appreciated stock, or physical items, you may see a decrease in taxable income as long as the recipient organization holds tax-exempt status.

Donations to recognized charities can also reduce the portion of your estate that might be taxable in the future. Some people choose donor-advised funds (DAFs), which allow an immediate deduction in the year of contribution while granting flexibility to disburse grants to charities later. Some donors opt to “superfund” a DAF by making several years’ worth of contributions upfront to secure a larger deduction in a single year.

Beyond DAFs, other vehicles—like charitable remainder trusts (CRTs)—can offer creative ways to give while retaining certain income or estate-planning benefits. Some donors also choose to transfer highly appreciated assets to avoid the capital gains they’d face if they sold those assets themselves. Given that gift-related rules can shift based on the type and size of the donation—and each method carries unique complexities—many people consult financial advisors and other tax professionals to maintain accurate documentation and potentially boost savings.

Please Note: Charitable giving can feel great—and offer a tax break—but not all donations are treated the same. You can generally deduct cash contributions up to 60% of your adjusted gross income, while donations of appreciated property—such as stocks or real estate—are typically capped at 30%.6 The type of gift and your income level both play a role in how much you can write off, so it’s also worth checking the limits before you give.

How Gifting Real Estate Works in Georgia

Gifting real estate in Georgia can be a strategic way to share wealth and manage future estate taxes. However, it involves specific documents for potential income tax considerations and may require filing a gift tax return if the property’s value crosses certain thresholds. 

If you’re planning to transfer property, here are the key steps and factors to keep in mind:7

Step 1) Prepare a Valid Gift Deed: Clearly state that no payment is expected, include the legal description of the property, and ensure you have the correct names and vesting details.

Step 2) Follow Georgia’s Signing and Recording Rules: Sign in front of a notary and witness, submit the Real Estate Transfer Tax Form (PT-61) online, and record the deed with the county clerk.

Step 3) Account for Federal Gift Tax Requirements: While Georgia doesn’t impose its own gift tax, gifts above the annual exclusion may trigger a federal gift tax return (Form 709).

Step 4) Know the Cost Basis Impact: The recipient inherits your original cost basis, which could lead to higher income tax on capital gains if they sell later.

Step 5) Factor in Estate and Future Tax Ramifications: Removing property from your estate can lower potential estate taxes, but consider whether heirs might benefit more from a stepped-up basis after your death.

Please Note: You don’t have to navigate this on your own. A great first step can be reaching out to a financial advisor who can coordinate with other professionals—like a CPA or an attorney—to handle the necessary paperwork, guide you through regulatory details, and help tailor a strategy that fits your goals.

Gift Tax Mistakes: What to Watch Out For

Although gifting can be a powerful strategy to reduce tax burdens and help loved ones sooner, mistakes can lead to wasted allowances or even unexpected penalties. By understanding and planning around these common pitfalls, you can better protect both your wealth and your peace of mind. Below are a few frequent errors:

Underestimating Your Own Needs: Giving away assets too quickly can jeopardize your future security. Large gifts should be balanced against the reality that your personal circumstances might change—such as healthcare costs or shifts in retirement plans—leaving you short on funds later.

Overlooking Reporting Requirements: If your gifts to one person exceed the annual exclusion in a single year, the amount above the exclusion must be reported on Form 709. Failing to file can prompt IRS inquiries and potential penalties down the road.

Losing Sight of Total Lifetime Transfers: It’s possible to give above the annual limit several times without owing immediate tax, thanks to the lifetime exemption. However, frequent large gifts will chip away at that lifetime buffer. If the total of your gifts plus your estate eventually surpasses the federal threshold, you may owe additional taxes.

Failing to Coordinate with Your Overall Estate Plan: Gifting without considering the rest of your estate strategy can lead to inconsistencies or conflicts later. For instance, some assets might be subject to different rules or have varying valuations, affecting both estate distribution and tax outcomes.

Disorganized Paperwork: Insufficient documentation can trigger confusion for both your heirs and the IRS. Maintain detailed records of dates, amounts, and recipients so you can accurately track your total gifting history. Proper paperwork also streamlines tax filing and estate settlement.

How Gifting Fits into a Comprehensive Financial Plan

Gifting can play a pivotal role in your broader financial and estate planning, helping you transfer wealth thoughtfully while possibly reducing taxes. Below are ways to integrate a gifting strategy into a complete plan:

Maximize Your Annual Exclusion: The annual gift tax exclusion (an amount set each year by the IRS) allows you to give a certain sum per recipient without dipping into your lifetime exemption. Consistently using this yearly exclusion can shift assets out of your estate over time, especially if you have multiple recipients, such as children and grandchildren.

Leverage Your Lifetime Exemption Strategically: Beyond the annual exclusion, you have a larger lifetime exemption to cover any gifts that exceed the yearly threshold. If you anticipate significant estate growth or aim to reduce future estate taxes, consider making larger gifts while keeping a careful eye on how much exemption you’ve used. Coordination with your overall estate plan is important here.

Streamline Charitable Giving: Charitable strategies, such as creating a donor-advised fund or making qualified charitable distributions from certain retirement accounts (if you’re eligible), can help you meet philanthropic goals while securing tax benefits. For example, a donor-advised fund allows you to take an immediate tax deduction even though the funds might be distributed to charities at a later date.

Consider Direct Payments for Tuition and Medical Expenses: If you wish to help loved ones with education or healthcare costs, paying schools or medical providers directly can be an ideal approach. These payments generally do not count toward your gift tax exclusion or lifetime exemption, preserving those limits for other gifting purposes.

Integrate with Your Estate Plan: Gifting is most effective when it aligns with your broader estate objectives. Work with professionals to determine whether trusts, family limited partnerships or other tools could help you accomplish multiple goals—such as asset protection, control over how funds are used, and efficient wealth transfer.

We Can Help You Further

Above, we explored how tracking your exemption amount each year, understanding the nuances of the lifetime gift tax, and staying informed about potential estate taxes can help you protect your long-term financial health. We also discussed situations where you may be required to file paperwork or end up paying the gift tax if your total contributions surpass certain thresholds.

Our financial advisory team can guide you through this process step by step. We’ll help you shape a gifting strategy that fits into your wider retirement and estate plans, whether you’re providing for loved ones, supporting charitable causes, or both. We’re also happy to collaborate directly with your existing accountant or attorney—or we can recommend trusted professionals from our vetted network—to make sure that all aspects of your plan work together seamlessly.

With the right tools and guidance, you can transfer wealth confidently while protecting your own financial security. We’ll explain your options, ensure proper documentation, and keep you updated on any regulatory changes.

Ready to learn more? We invite you to schedule a complimentary consultation and discover how a thoughtful gifting plan can benefit both you and those you care about. 

Resources:

1. https://www.americanbar.org/groups/real_property_trust_estate/resources/estate-planning/estate-gift-gst-taxes/
2. https://www.kiplinger.com/taxes/gift-tax-exclusion#:~:text=Gift%20tax%20limit%202025,%241%2C000%20from%20last%20year’s%20limit
3. https://www.kiplinger.com/taxes/whats-the-new-estate-tax-exemption
4. https://www.schwab.com/learn/story/countdown-gift-and-estate-tax-exemptions
5. https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes-for-nonresidents-not-citizens-of-the-united-states#:~:text=Your%20gifts%20of%20present%20interests,citizen%20total%20more%20than%20%24190%2C000
6. https://www.taxesforexpats.com/articles/financial-planning/tax-deductions-for-charitable-donations.html
7. https://www.deeds.com/forms/georgia/gift-deed/