2019 Estate and Gift Tax

The IRS has published new guidelines relating to estate and gift tax changes for 2019. Starting this year, estates of decedents who die during 2019 have a basic estate tax exemption amount of $11,400,000 (increased from $11,180,000 in 2018). This means that the estate of a person dying in 2019 with more than $11.4 million in assets may pay a federal estate tax (on assets which do not pass to charity or to a surviving spouse). Over both deaths of a married couple, $22,800,00 may pass estate tax-free to the next generation.

This basic exemption amount is also a lifetime exemption from the gift tax applicable to taxable gifts—which, generally, are gifts exceeding the annual exclusion (see below) and certain other statutory exceptions. Taxable gifts made during life reduce the basic exemption amount available to one’s estate by the reported value of the gift.

As to non-taxable gifts, the federal annual exclusion limit remains at $15,000 per recipient, per year. Annual exclusion gifts, in many cases, are not reportable on a gift tax return. Annual gifts up to $30,000 made jointly by spouses can be made to each child or other recipient. Spouses who elect to split gifts on a tax return can also make unequal separate annual gifts to a child or other recipient that together equal $30,000.

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