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ESTATE AND GIFT TAX CONSIDERATIONS(f) Taxable GiftsGift and estate taxes are unified and aggregated to take account of all gratuitoustransfers, whether during life or taking effect at death. Death is not, however, thetaxable event for purposes of the gift tax. Taxable gifts are accounted for andtaxed on an annual basis during the life of an individual. 26 A taxable gift isdefined as the “total amount of gifts made during the calendar year” above theannual exclusion (if applicable), less allowable gift tax deductions. 27(g) Exclusions from Taxable GiftCertain transfers are excluded from the definition of a taxable gift.Tuition for Education. The federal gift tax law excludes from tax transfers ofproperty (typically, cash payments) made directly to a qualified educationalorganization for tuition, on behalf of some individual (typically, but not limitedto, descendants). 28 The tax law encourages the private funding of education freeof potential transfer tax.Medical Care Costs. The federal gift tax law excludes from tax transfers of property(again, typically cash payments) made directly to a medical care provider formedical care services on behalf of some individual (typically, but not limited to, afamily member). 29 Recognizing that health care is expensive and can be a significantfinancial burden, the federal tax law does not impose an additional financialburden on those who come to the aid of others in the payment of medical services.Waiver of Pension Rights. The third exclusion from the definition of a taxablegift is for waivers of certain pension survivor benefits or rights to them. 30Loans of Art Works. The fourth exclusion from the definition of a taxable giftinvolves a loan of any work of art that is archaeological, historic, or creative tangiblepersonal property. The federal tax law excludes from the gift tax loans ofart works made to a tax-exempt charitable organization (other than a privatefoundation) and used for the organization’s tax-exempt purposes. 31Transfers to Political Organizations. The fifth exclusion from the definition ofa taxable gift is for transfers to certain political organizations. 32(h) Annual ExclusionAs noted above, taxable gifts are all gifts made during a calendar year after takinginto account the annual exclusion, less allowable deductions. The annual26 IRC § 2501(a)(1).27 IRC § 2503.28 IRC § 2503(e).29 Id.30 IRC § 2503(f).31 IRC § 2503(g). See, e.g., Priv. Ltr. Rul. 9303007. See § 9.1(b).32 IRC § 2501(a)(5). See Tax-Exempt Organizations, ch. 17. 228