Tax Insights

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Estate, Gift Tax Exemption Expected to Rise in 2017

While the IRS has not yet released the new amounts for 2017, Thomson Reuters has calculated the unified estate tax exclusion for decedents dying in 2017 and the gift tax lifetime exclusion for 2017 will rise to $5,490,000.

This is a small increase of $40,000 from the 2016 amount of $5,450,000.

The 2017 gift tax annual exclusion remains at $14,000. The gift tax annual exclusion has been $14,000 since 2013.

Any person can gift up to $14,000 to another person in 2017 without using any of their lifetime exclusion. Married couples can gift up to $28,000 to any person.

As in prior years, payments for the benefit of an individual made directly to qualified educational organizations for tuition or for medical care expenses paid directly to providers are excluded from the gift computation.

Also coming is an increase of the Generation-skipping Tax exclusion to $5,490,000 for transfers in 2017. The 2016 GST exemption amount was $5,450,000.

The ability to use a Deceased Spouse’s Unused Exclusion (often called DSUE or “portability”) continues to be available in 2017. The personal representative must timely file a Form 706 United States Estate (and Generation-Skipping Transfer) Tax Return to claim this benefit. Form 706 is due within nine months of the decedent’s date of death. A six month extension is available.

Henry & Horne professionals are available to answer your questions regarding your gift or estate planning.

By Melinda Nelson, CPA