– The annual gift tax exclusion amount for 2024 is $18,000 per recipient, allowing individuals to make tax-free gifts of this amount to an unlimited number of recipients.
– The lifetime gift and estate tax exemption amount for 2024 is $13.61 million, meaning that transfers up to this amount do not require a tax payment.
– Married couples have a combined lifetime gift and estate tax exemption amount of $27.22 million for 2024. – The gift and estate exemption amount in 2023 is $12.92 million, and an additional $690,000 can be gifted or passed on in 2024 without incurring tax.
– The lifetime gift and estate tax exemption amount is scheduled to be reduced to approximately $7 million in 2026, but the IRS will not claw back any excess gifts made prior to 2026.
– Spouses can gift an unlimited amount to each other without using the gift and estate tax exemption, but the gifted assets are included in the surviving spouse’s estate at their death.
– The generation-skipping transfer (GST) tax is imposed on transfers to grandchildren and more remote descendants, and the GST exemption amount for 2024 is $13.61 million. – Estates and trusts are subject to the same income tax rates as individuals, but the income brackets for those rates kick in at lower dollar amounts.
– It is often advisable to distribute income from a trust to beneficiaries in lower tax brackets in order to receive a deduction for the trust and lower the income tax liability.
– The exclusion amount for gift, estate, and generation-skipping transfer (GST) tax is scheduled to change in 2026, providing a limited window through the end of 2025 to achieve significant estate tax savings.
– Certain gifts made with retained interests within 18 months of the gifting taxpayer’s death are an exception to the no-clawback rule for estate tax purposes.
– Annual gifts to non-US citizen spouses are limited to $185,000 in 2024, and a non-US citizen spouse is entitled to a $13.61 million standard estate tax exemption amount. Amounts passing to a surviving non-US spouse in excess of the estate tax exemption amount can be deferred from estate tax using a qualified domestic trust (QDOT).
Leave a Reply