IRS Estate Tax Exclusion

For 2016, the IRS estate tax exclusions are as follows:

  • the estate tax exclusion amount for deaths in 2016 is $5.45 million
  • the annual exclusion for gifts is $14,000
  • the applicable exclusion amount for lifetime gifts is $5.45 million

The gross estate of the decedent consists of all probate and non-probate assets owned by the decedent at the date of death. The fair market value of these items is utilized to determine value. Property included in your estate may consist of cash and securities, real estate, insurance, trusts, annuities, business interests and other assets.

The gift tax is a tax on the transfer of property to another person, where there is nothing received in return, or less than full value is received. The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts:

  • Gifts that are not more than the annual exclusion for the calendar year
  • Tuition or medical expenses you pay for someone (the educational and medical exclusions)
  • Gifts to your spouse
  • Gifts to a political organization for its use
  • Gifts to qualifying charities are deductible from the value of the gift(s) made

If you are planning your estate, it is best to contact an experienced attorney who can guide you through the process and make sure that your rights are protected.  The Law Offices of Hunziker, Jones & Sweeney provides experienced and skilled representation for your estate planning matters.  Call (973) 256-0456 for a consultation.

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