Monday, November 9, 2015

New Inflation-Adjusted Thresholds for Estates and Gifts Announced by IRS for 2016

The Internal Revenue Service recently released Revenue Procedure 2015-53, which announced certain inflation-adjusted figures for 2016. A number of these items relate to estate, gift, and generation-skipping transfer (“GST”) tax amounts. Some of the more important items are highlighted below.

Estate, Gift, and GST Tax Exemption Amount

The cumulative amount that an individual can transfer either during their lifetime or at their death without estate, gift, or GST tax liability has increased from $5,430,000 in 2015 to $5,450,000 in 2016.

Annual Gift Tax Exclusion Amount

For calendar year 2016, the maximum amount that an individual can gift tax free to any number of donees remains unchanged at $14,000 per donee. If a married couple elects to split gifts, that couple can gift up to $28,000 per donee.

Annual Gift Tax Exclusion Amount to Spouse Who is Not a U.S. Citizen

The amount that a married individual can gift tax free to a spouse who is not a U.S. citizen has increased from $147,000 in 2015 to $148,000 in 2016.