Increased Estate Tax Exemption for 2018

target-clipart-target-clipart-1Official numbers from Treasury will not be released until late October, but here are my projections for 2018 estate and gift tax exclusion amounts:

  • The Basic Exclusion Amount (IRC §2010(c)(3)) used to compute the Unified Credit Against Estate Tax will probably be $5,600,000; this would be an increase of $110k (or 2.75%) over 2017’s exclusion amount;
  • This Basic Exclusion Amount of $5,600,000  is equivalent to a Unified Credit of $2,185,800;
  • The Gift Tax Annual Exclusion amount (IRC §2503(b)) should increase to $15,000; this will be the first increase since 2013. The gift tax annual exclusion is rounded down to the nearest multiple of $1,000. Any guesses on how long until the next increase in the annual exclusion?

These predictions assume that Congress makes no changes to the estate and gift tax laws before the end of the year.

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Trust Matrix – Inter vivos Trusts

This table lays out the Income Tax and Estate Tax treatment of various inter vivos trusts (i.e. trusts funded during a taxpayers life).

Inter vivos
Trust Matrix
Estate Tax Inclusion
Excludable from Taxpayer’s Estate Includable in Taxpayer’s Estate
Income Tax Taxation Non-grantor Trust
  • Simple or complex inter vivos trust
  • Incomplete gift Non-Grantor Trust = ING (e.g. DING, NING)
Grantor Trust
  • Intentionally Defective Grantor Trust (IDGT)
  • Revocable Trust
  • QPRT (during initial trust term)
  • GRAT (during initial trust term)
  • CRAT and CRUT (during initial trust term)

Increased Estate Tax Exemption for 2017

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Official numbers from Treasury will not be released until late October, but here are my projections for 2017 estate and gift tax exclusion amounts:

  • The Basic Exclusion Amount (IRC §2010(c)(3)) used to compute the Unified Credit Against Estate Tax will probably be $5,500,000; this would be an increase of $50k (or 0.9%) over 2015’s exclusion amount;
  • This Basic Exclusion Amount of $5,500,000  is equivalent to a Unified Credit of $2,145,800;
  • The Gift Tax Annual Exclusion amount (IRC §2503(b)) should stay at $14,000; we should see the next increase in the Gift Tax Annual Exclusion in 2018.

These predictions assume that Congress makes no changes to the estate and gift tax laws before the end of the year.

Increased Estate Tax Exemption for 2015

English: Dartboard with darts. Suomi: Tikkataulu.The Treasury Department will not give official numbers until November, but I have made the following projections for 2015 estate and gift tax exclusion amounts:

  • The Basic Exclusion Amount (IRC §2010(c)(3)) used to compute the Unified Credit Against Estate Tax will probably be $5,420,000; this would be an increase of $80k (or 1.5%) over 2014’s exclusion amount;
  • This Basic Exclusion Amount of $5,420,000  is equivalent to a Unified Credit of $2,113,800;
  • The Gift Tax Annual Exclusion amount (IRC §2503(b)) should stay at $14,000.

These predictions assume that Congress makes no changes to the estate and gift tax laws before the end of the year.

Federal Unified Credit for 2014

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The IRS has recently published Rev. Proc. 2013-35. This revenue procedure is the official confirmation of the various inflation-adjusted amounts referenced in the tax code.

The Base Exclusion amount, used for both the estate tax exemption and the gift tax exemption will be $5,340,000 in 2014 [IRC §2010(c)(3)]. This is the same amount that I predicted in July of 2013 (see post here). The equivalent Unified Credit amount is $2,081,800.

The annual gift tax exclusion will remain at $14,000 in 2014 [IRC §2503(b)].


Other inflation-adjusted amounts:

The highest income tax bracket for estates and non-grantor trusts will be $12,150 in 2014 [IRC §1(e)]. This same amount is the floor for the application of the 3.8% Medicare tax on estates and non-grantor trusts on their undistributed net investment income [IRC §1411].

The Alternative Minimum Tax exemption for estate and non-grantor trusts will be $23,500 in 2014 [IRC §55(d)(1)].


Here is a summary of the exemption amounts, and the equivalent unified credit amounts for both the estate tax and the gift tax:

Years Exemption Amount Unified Credit
2011 $5,000,000 $1,730,800
2012 $5,120,000 $1,772,800
2013 $5,250,000 $2,045,800
2014 $5,340,000 $2,081,800

See: IRS Rev. Proc. 2013-35

Increased Estate Tax Exemption for 2014

English: Dartboard with darts. Suomi: Tikkataulu.The Treasury Department will not provide official numbers until November, but I have made the following projections for 2014 estate and gift tax exclusion amounts:

  • The Basic Exclusion Amount (IRC §2010(c)(3)) used to compute the Unified Credit Against Estate Tax will probably be $5,340,000; this would be an increase of $90k over 2013’s exclusion amount;
  • This Basic Exclusion Amount is equivalent to a Unified Credit of $2,081,800;
  • The Gift Tax Annual Exclusion amount (IRC §2503(b)) should remain at $14,000.

These predictions assume that Congress makes no changes to the estate and gift tax laws before the end of the year.