Gift and Estate Tax: The annual exclusion gift limit is still $14,000. An individual can give $14,000 to as many different people as desired. A married couple could gift $28,000 to an unlimited number of people. The gift giver is not required to file a return with the IRS, and the gift recipient is not required to report the gifts as income; it’s a beautiful thing!
The lifetime estate tax exemption has increased from $5,450,000 up to $5,490,000 per person. Meaning there is no estate tax payable unless an estate is worth more than $5,490,000, and a married person estate more than $10.9 million (reduced by gifts made during lifetime, above the annual gift limit discussed above). Remember: only gifts larger than $14,000 (made by an individual), or $28,000 (made by a married couple) reduce the lifetime estate and gift tax exemption.
Family-Owned Entities: Entities such as limited liability companies and limited partnerships, are often used in estate planning to consolidate family business and agricultural operations. Also, they allow valuation discounts on land or other assets and thus reduce the size of taxable estates. However, the IRS has issued proposed regulations for Section 2704 that will dramatically limit their usefulness for estate tax avoidance. The good news is the new rules are still in draft form and are likely only valid from the date enacted (not retroactively). Meaning now is the perfect time to do some planning, for those families that may have a taxable estate. Have questions about how these changes might impact you?
Call our office at (530) 674-9761 – we can help!
Jacqueline Hyatt Dailey joined the Law Office of Paulla Hyatt-McIntire after spending two years in the San Francisco office of Andersen Tax, LLC, wealth and tax advisory firm.
Her current practice focuses on the representation of individuals at all levels of complexity in estate planning matters, including preparation of revocable and irrevocable trusts for married, single and same-sex partners and administration of trusts and estates.
She also assists clients with the formation of business entities, general business matters, elder law and estate gifting issues.
Before her focus on estate planning, Jackie’s practice focused on federal, state, and international tax planning and compliance for alternative investment vehicles, corporations, and partnerships.