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.

Will New York Soon Have a Gift Tax?

Governor Cuomo’s recent budget proposal for New York incorporated some tax proposals made by two separate blue-ribbon panel.

A recent post by John D. Dadakis (a Partner at Holland & Knight in New York), explores the Governor’s proposal.

New York Gift Tax Changes Imminent? | Estate Planning content from WealthManagement.com

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It seems reasonable to think that Governor Cuomo would not have made any proposals in his budget which he didn’t think that a reasonable chance of becoming legislation. Time will tell, but not too much time since New York’s budget is due April 1, 2014. New York has had 3 years running of on-time budgets; expect the trend to continue.

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.

Federal Unified Credit for 2013

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The recent passage of the American Taxpayer Relief Act (ATRA) of 2012 enacted major estate and gift tax reform, and a certain sense of permanence for estate tax planners.

The ATRA maintained the unification of the estate tax exemption amount and the gift tax exemption amount. This amount continues to be indexed for inflation [IRC §2010(c)(3)(B)].

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

In Rev. Proc. 2013-15, §2.13, the IRS confirmed that the basic exclusion amount against estate tax under §2010 for an estate of any decedent dying during calendar year 2013 (and by extension, the unified credit against gift tax under §2505) is $5,250,000.

See: IRS Rev. Proc. 2013-15