The Internal Revenue Service (IRS) has announced that the individual estate and gift tax exemption will be $5.45 MM per individual for 2016, which translates into a $10.9 MM exemption for Married Couples. This is an increase from the $5.43 MM exemption in 2015. The annual gift tax exclusion remains the same at $14,000 per individual recipient.
The inflation adjustment is important to wealthy taxpayer's who try to reduce their estates below the exempt amount. The exemption amount was $2 million in 2008, $1 million in 2003 and $675,000 in 2001and prior years. The top federal estate tax rate remains at 40%.
The federal gift tax is tied to the estate tax, so the inflation indexing helps wealthy taxpayers by allowing them to make tax-free lifetime gifts as well up, to the exemption amount.
Robert S. Blumenfeld -
Mr. Blumenfeld concentrates his practice in the areas of International Tax and Estate Planning, Probate Law, and Representation of Resident and Non-Resident Aliens before the IRS.
Prior to joining Marini & Associates, P.A., he spent 32 years as the Senior Attorney with the Internal Revenue Service (IRS), Office of Deputy Commissioner, International.
Sources:
|
|
Read more at: Tax Times blog
