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It began in 1773 when the American colonists revolted against the British taxes by emptying boxes of tea into the Boston Harbor, resulting in the infamous Boston Tea Party.

The tax law has since then evolved into complex laws and regulations that Americans strive to understand so they can minimize the amount of taxes they pay each year.

One technique available for current and long-term tax savings is using the $10,000 annual gift tax exclusion. This technique can result in substantial long-term tax savings by moving assets out of a taxable estate.

Taxpayers may gift up to $10,000 per donee each year. There is no limitation on the number of donees one may gift to. The only restriction is that the donee must be immediately able to use or enjoy the property. Gifts that fall under the annual exclusion do not reduce a donor's unified tax credit, and the donor does not have to file a gift tax return.

If a taxpayer decides to gift more than $10,000 to an individual, then the donor would have to file a gift tax return and the amount gifted over $10,000 would reduce the unified tax credit. Please note, the donee never has to file a gift tax return.

However, a spouse may elect to be treated as gifting half of the gift. This is known as gift-splitting. In effect, a married couple would be able to gift $20,000 per individual without reducing their unified tax credit. However, in order for gift-splitting to apply, a gift tax return must be filed by the donor on which the spouse consents to treat all gifts as being made half by each.

In addition to the annual $10,000 exclusion, a taxpayer may pay for the tuition on behalf of an individual. This amount is not subject to gift tax, nor is there a dollar amount limitation on the exclusion, as long as the payments are made directly to the qualifying educational provider. This is also true for medical payments made on behalf of an individual, as long as the payments are paid directly to the qualifying medical provider.

As one can perceive, gifting one's property is a tax-savings technique that is straightforward to use. This technique can provide substantial tax savings in the long-run by gifting away property that would otherwise be considered part of one's taxable estate.

Although the tax law has come a long way since 1773, American attitudes today still reflect the attitudes of the colonists when the subject is taxation.