Legal Definitions - gift-tax exclusion

Definition: The amount of money that can be given as a gift without being subject togift tax. Currently, the annual exclusion is up to $15,000 per person.

Example: If you give your friend $10,000 as a gift, you do not have to pay gift tax on that amount because it falls under the annual exclusion limit.

This definition explains that the gift-tax exclusion is the amount of money that can be given as a gift without being subject to gift tax. The example provided illustrates how the annual exclusion works in practice. It shows that if you give someone a gift that falls under the annual exclusion limit, you do not have to pay gift tax on that amount.