For a married couple, how much of their total gifts can they give to avoid reducing their exemption?

The correct response stems from the annual exclusion for gifts under U.S. tax law. For the year in question, the IRS allows an exclusion of $15,000 per recipient per donor. In the case of a married couple, each spouse can individually give $15,000 to the same person without reducing their lifetime gift exemption, which is the cumulative amount every individual can give over their lifetime without incurring gift taxes.

Therefore, when both spouses contribute, they can combine their exclusions to give a total of $30,000 to each recipient without impacting their exemption. This means that a couple can make gifts totaling $30,000 to an individual and still remain within the bounds of the annual exclusion, thus preserving their lifetime gift tax exemption for larger future gifts.

Understanding this concept is vital for efficient estate planning and tax management, allowing couples to optimize their gifting strategies while minimizing tax implications.