Gift givers have an exciting IRS update.
Few people are fans of these words, whether taken together or individually.
Together, however, the disdain more than doubles.
According to a recent Financial Planning article titled “IRS update will benefit clients making gifts to family members,” some new updates make these words a little more pleasant.
What are they?
It doubles from $5 million per person to $10 million.
With inflation this translates to $11,180,000 in 2018 and $11,400,000 in 2019.
You can double these exemption numbers if you are a married couple filing together.
The estate and gift tax exemption can be applied to lifetime giving.
The annual gift exclusion amount remains at its 2018 level for 2019.
What is that number? $15,000 per donee.
Seems simple, right?
The estate tax exemption is scheduled to revert to the previous amount after 2025.
What will happen if you use the exclusion now, but die after 2025?
Will you be taxed on those gifts?
The IRS has spoken.
The answer is no.
There will be no feared "claw back"!
Using these exemptions to the full may be a good strategy.
Work with an experienced estate planning attorney to determine whether this gift strategy is useful for your circumstances.
Reference: Financial Planning (November 21, 2018) “IRS update will benefit clients making gifts to family members”