What is the annual exclusion?
Here is yet another term whose application can have a similar desired impact on transfer tax liability as does the unified credit or the unlimited (marital or charitable) deductions. Exclusions are not deductions; but for transfer tax purposes, they essentially could be deemed the same; it’s mostly a matter of semantics. An exclusion is something that is removed altogether from the value of the transfer base of the transferor (deductions are deducted from the transfer). The transfer tax exclusion pertains primarily to the annual gift tax exclusion.
