As of January 1, 2024, the federal lifetime gift and estate tax exemption amount has increased to $13.61 million per person (up from $12.92 million in 2023). This means that individuals may now transfer up to $13.61 million - tax-free - during their lifetime or at death. Married couples may now transfer up to $27.22 million with proper estate planning.
The United States has taxed the estates of decedents since 1916, and gifts since 1924, with tax rates and exemption levels that have varied greatly over the last two decades.
We all do our best to file tax returns on time. But when the deadline is approaching and we’re all so busy, we might think, “There’s no tax, so what’s the harm. I’ll just get it done when I can”. Sounds reasonable, right?
The United States has taxed the estates of decedents since 1916, and gifts since 1924, with tax rates and exemption levels that have varied greatly over the last two decades. Massachusetts is one of several states in the country that has a state estate tax. Among those states, Massachusetts is one of two states with the lowest estate value that is subject to tax.
The United States has taxed the estates of decedents since 1916, and gifts since 1924. With tax rates and exemption levels varying greatly over the last two decades, including recent changes with the Tax Cuts and Jobs Act (TCJA), I thought it would be helpful to outline some key forms and current thresholds relating to estate & gift tax.
So, you were asked to be the Personal Representative (PR) of an estate. It seemed like accepting was the right thing to do at the time. How hard can dividing up your parent’s lifelong savings and assets between siblings really be? Consider the following in deciding to be a PR and navigating the estate administration process.
Clients and many taxpayers often wonder whether it might be beneficial in retirement or while still working to change their place of residency as a way to minimize their current and future state tax obligations, or as part of their long-term strategy to minimize estate taxes to a more tax-friendly state. While most states tax all or a portion of the income of their residents, certain states like Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming have no state income tax, and New Hampshire and Tennessee do not tax earned wages. These and other states may not have “state” estate and/or inheritance tax as well, making them very appealing for those looking to change their residency in the long-term.
The results are in, and regardless of which side you were rooting for, now is a good time to prepare for changes ahead in the new year. While President-elect Joe Biden has not yet provided concrete details on his plans to modify estate taxes, he has indicated that he supports raising estate taxes and changing the taxation of capital assets upon death.
Trusts are a great way to put conditions on how, when, and to whom your assets will be distributed after you pass away. However, there are several options and specific terms to know when it comes to setting up a trust, and many people aren't sure of the best path forward.
To help explain, I've put together some frequently asked questions and answers on the subject.
The IRS recently released an update to its federal estate tax regulations, relaxing the rules on making a late portability election to a descendant's estate.
Currently, the federal estate tax exemption is $5.4 million, meaning that when a person dies, they will only pay federal estate tax (up to 40%) if the value of their estate exceeds $5.4 million. In 2011, the IRS introduced a concept called 'portability' to the federal estate tax exemption, and has now added an additional rule to allow for a late portability election. Here's what you should know:
