2017 Estate and Gift Tax Update

Happy New Year! The IRS has announced the 2017 Estate and Gift Tax Exemption amounts. Recall, California does not have a state estate tax, thus, the Federal Estate Tax and exemptions from it are all we are discussing here.

Estate Tax Exemption: Any U.S. citizen who dies in 2017 has an exemption of up to $5,490,000 from Federal estate tax. This means that if you die with assets valued below this threshold, no Federal estate tax is owed (assuming you did not reduce your estate tax exemption with lifetime gifts or by other means). For married couples, the estate tax exemption has ballooned to $10,980,000 using portability.

Annual Gift Tax Exclusion: For 2017, the annual gift tax exclusion amount remains at the 2016 level of $14,000 per donee. Married couples can “couple” their gifts to be $28,000 per donee. This means that you can give up to $14,000 to any individual in the calendar year while avoiding gift taxes and the reduction of your lifetime exemption amount.

Stay tuned for more updates from our firm and be on the lookout for our Quarterly Client Newsletters. Wishing you and your loved ones a healthy and happy new year!