IRS Announces 2017 Estate, Gift and GST Tax Limits. The IRS has announced that, for 2017, the lifetime gift and estate tax exemption will be $5.49 million per individual. This represents an increase from $5.45 million in 2016. That means that an individual can give up to $5.49 million during his or her life, or upon his or her death, to others without paying federal gift or estate tax on the transfer. A married couple may shield up to $10.98 million from federal gift and estate tax. For a wealthy couple who has used up every dollar of their exemption prior to this increase, another $80,000 will now be available to gift to their loved ones in 2017 free of federal gift and estate tax.
The generation-skipping transfer (GST) tax exemption will also rise to $5.49 million in 2017.
The annual gift exclusion remains at $14,000 for 2017.
New Jersey Repeals State Estate Tax. Governor Christie signed a bill eliminating the state estate tax for estates of New Jersey residents dying on or after January 1, 2018. For the estates of New Jersey residents dying on or after January 1, 2017 and before January 1, 2018, the state estate tax exemption from will be increased from its current $675,000 amount to $2 million.
The new law leaves in place the New Jersey inheritance tax, which applies to transfers of assets at death by a New Jersey resident to beneficiaries other than the decedent's spouse, parents, grandparents, descendants and charitable organizations. The inheritance tax rate ranges from 11 to 16 percent. A transfer at death of less than $25,000 to a decedent's sibling or the spouse of a decedent's child is exempt from inheritance tax.
Please contact Lara M. Sass, PLLC to learn more about making transfers to your loved ones by utilizing and leveraging your gift, estate and GST tax exemptions.