If I give a gift in excess of the annual exclusion amount, what does that mean?

Gifts in excess of the annual exclusion amount ($15,000 in 2021) utilize your lifetime exclusion amount for the amount in excess of the annual exclusion. For example, a gift in the amount of $20,000 to a single recipient would use your annual exclusion of $15,000 plus $5,000 of your $11.7 million lifetime exclusion amount.

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