At the end of October, the IRS announced the 2016 estate and gift tax lifetime exemption and annual gift taxexclusion. These amounts are tied to inflation, which has been minimal due to a number of factors—especially the lack of a federal interest rate hike during the first three quarters of 2015.
The estate and gift tax lifetime exemption rose from $5.43 million in 2015 to $5.45 million in 2016. This means married couples can pass on $10.9 million free from federal estate tax. The annual gift exclusion did not increase, and will remain at $14,000 for 2016.
2017 should be an interesting year for the lifetime exemption. A bill to kill the exemption, which has almost tripled in the last 8 years, passed the House of Representatives in April of 2015. Various Presidential hopefuls have made their point of view known on the issue. We will keep you posted on the blog with any with any updates.
If you have any questions regarding estate or gift tax, please contact one of our Estate Planning or Estate Tax lawyers for a free consultation.