The Unlimited Spousal Deduction allows spouses to transfer an unlimited amount of money to each other, including in the event of death, without penalty or tax.
Gifts made to other persons or organizations that are not spouses are subject to IRS gift limits and inheritance tax.
Any property transferred to the surviving spouse may be included in the taxable property of the spouse.
Under current regulations in 2021, the tax-free gift limit is $15,000 per person, and the inheritance tax exemption is $11.7 million.
In 2022, these amounts will increase to $16,000 and $12.06 million.