Projected 2018 estate and gift exemption amounts have been calculated by experts using inflation adjustments. While the IRS has yet to release these figures, they are expected to do so later this year. In the meantime, these numbers may be used as a guide.
2018 Estate and Gift Tax Limits. The estate and gift tax exclusion amount increases to $5.6 million per person in 2018. This represents an increase from $5.49 million in 2017. That means that an individual can give up to $5.6 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 $11.2 million from federal gift and estate tax in 2018. For a wealthy couple who has used up every dollar of their exemption prior to this increase, another $220,000 will now be available to gift to their loved ones in 2018 free of federal gift and estate tax.
2018 GST Tax Limit. The generation-skipping transfer (GST) tax exemption will also rise to $5.6 million in 2018.
Annual Exclusion Amount. The gift tax annual exclusion amount increases to $15,000 in 2018 (up from $14,000 in 2017).
New York Exclusion Amount. The New York state exclusion amount is currently $5.25 million for decedents dying between April 1, 2017 through December 31, 2018. Beginning in 2019, the New York state exclusion amount will be equal to the Federal exclusion amount.
New Jersey State Estate Tax Repeal. The New Jersey state estate tax has been repealed for estates of New Jersey residents dying on or after January 1, 2018.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 was increased from $675,000 to $2 million.
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, remains in place. 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.