Changes to Estate Tax Exemptions 2017
Annual Exclusion for Gifts
As of January 1, 2017 the annual exclusion amount for gifts will stay at $14,000. This means that individuals can gift up to $14,000 to any person without incurring a gift tax or having to make any required filing. The amount in excess of the $14,000 will simply reduce the federal estate tax exemption available in the year of death. For married couples, this means that they could gift $28,000 to each child without having to file any gift tax return. Tuition and medical payments can also be made on behalf of another individual and these payments are in addition to the $14,000 exclusion gifts.
Federal Estate Tax Exemption
The 2017 federal estate tax exemption amount is $5.49 million, up from $5.45 million in 2016, and $5.43 million in 2015. The federal estate tax remains at 40%.
Minnesota Estate Tax Exemption
The Minnesota estate tax exemption amount will increase in 2017 to $1.8 million, up from $1.6 million in 2016, and $1.4 million in 2015. This state estate tax exemption will increase to $2 million in 2018. The Minnesota estate tax ranges from 10% – 16%.
Impact of the Election on Federal Estate Taxes
Since 2016 is an election year, the estate tax is receiving more attention than usual. In this election cycle, we have two presidential candidates with drastically different views on the estate tax. We have outlined the differences below.
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