In 2011, the Federal Estate Tax Exemption was $5 million and was set for annual inflation increases. Since 2011, there have been small annual increases. In 2017, the Federal Estate Tax Exemption has been increased to $5,490,000. This means that any individual who passes away in 2017 can give away $5,490,00 (less any taxable gifts made during their lifetime). For married couples, each person can give away $5,490,000; therefore, a married couple, has a combined $10,980,000 they can give away federal estate tax free.
Unlike the Federal Estate Tax, the annual gift tax exclusion did not increase in 2017. Therefore, an individual can still give $14,000 per person, per year. If an annual gift to any individual exceeds $14,000, the gift must be reported on a Gift Tax Return, Form 709 and the overage is applied to and reduces the Federal Estate Tax exemption at death.
If you would like to discuss annual gifting or tax planning, please call us.
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