Cal. Code Regs. tit. 18 § 15426
Only one specific exemption is allowed in respect to a particular donee regardless of the number of calendar years during which the donor may make gifts to such donee.
The exemption must be applied to the amount of net gifts (see Section 15118), as they are made. If, however, the exemption, or the unused portion thereof, exceeds the amount of net gifts made in a particular calendar year, the excess may be applied to the net gifts made in subsequent years, until the maximum amount of the exemption has been used. Thus, for example, if A makes net gifts totaling $2,500 to B, his brother, during the calendar year 1958, the entire specific exemption of $2,000 which is allowable in such case must be taken for the gifts on the return filed for 1958. On the other hand, if the net gifts to B had totaled $1,500, only $1,500 of the exemption would have to be taken for the year 1958, and A could apply the balance of the exemption, or $500, to the amount of net gifts made by him to B in later calendar years.
It is to be noted that no part of the specific exemption is considered to be used in any calendar year until after the application of the annual exemption for that year and the charitable and intangibles exemptions, if any.
NOTE: Reference: Section 15426, Revenue and Taxation Code.
Cal. Code Regs. Tit. 18, § 15426