Currently the federal lifetime gift tax exemption is $1,000,000, which means that if you make a single gift in excess of $1,000,000 or a series of gifts that exceed this amount, then you will owe a federal gift tax. This exemption will remain at $1,000,000 in 2009. Two states also assess a gift tax, Connecticut and Tennessee. Louisiana abolished its gift tax on July 1, 2008, and North Carolina abolished its gift tax on January 1, 2009.
You can gift up to $13,000 per person, per year without incurring any federal gift tax - these gifts are referred to as "Annual Exclusion Gifts" and aren't subject to the federal gift tax at all. Married couples can combine their annual exclusion gifts and gift up to $26,000 per person, per year, but split gifts must be reported to the IRS on Form 709.
Gifts to a spouse who is a U.S. citizen are exempt from gift taxes due to the unlimited marital deduction, while gifts to a noncitizen spouse are exempt up to the first $133,000 in 2009.
The annual exclusion amount was indexed for inflation beginning in 1997:
Chart Showing Annual Exclusion From Gift Taxes: 1997 - 2009