An exemption equivalent is the amount of annual gifts that is automatically exempt from the gift tax.

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An exemption equivalent refers to the amount an individual can transfer tax-free over their lifetime or at death under the unified federal estate and gift tax system, not the annual gift tax exclusion amount which is a separate, smaller amount that can be given each year to any number of people without incurring a gift tax or using any of the lifetime exemption.

An Exemption Equivalent Is the Amount of Annual Gifts That