Chartered Retirement Planning Counselor (CRPC) Practice Exam 2026 - Free CRPC Practice Questions and Study Guide

The primary advantage of gift splitting for married couples is that it allows for a higher total gift exclusion. When both spouses agree to gift-split, they can combine their individual annual gift tax exclusions, effectively doubling the amount that can be gifted to a recipient without incurring a gift tax. For example, if the individual annual exclusion is $17,000 per person in a given tax year, through gift splitting, a married couple can give a total of $34,000 to a single recipient without triggering any gift tax liabilities. This strategy can be particularly beneficial for those wanting to transfer larger sums to family members or others without facing tax implications.

In contrast, the other options do not capture the fundamental benefit of gift splitting. While reducing taxable income, transferring assets, or simplifying estate planning are important considerations in financial planning, they do not directly relate to the specific mechanism and benefits of gift splitting as it pertains to gift tax exclusions. Gift splitting is fundamentally about leveraging the annual exclusion amounts effectively, making option A the most relevant choice.