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2017 Estate and Gift Tax Limits

For 2017, the federal estate and gift tax exemption is $5.49 million per individual.  This means that an individual can leave $5.49 million to heirs and pay no federal estate or gift tax.  Surviving spouses can carry over each other’s unused exemptions in effect shielding almost $11 million from federal and estate gift taxes. For taxable estates, the rate is 40%. The annual gift exclusions remained at $14,000 per person.  The State of Florida does not impose a state estate tax or a state inheritance tax like 18 other states and the District of Columbia.

The fate of the federal estate tax is uncertain. President-elect Donald Trump wants to repeal it and impose a new carryover basis regime for estates over $10 million. The Trump campaign web site states:

 “The Trump Plan will repeal the death tax, but capital gains held until death and valued over $10 million will be subject to tax to exempt small businesses and family farms. To prevent abuse, contributions of appreciated assets into a private charity established by the decedent or the decedent’s relatives will be disallowed.”

Under the Trump Plan, once estates reach a certain threshold, heirs would owe capital gains taxes on appreciated assets. It looks like Trump would repeal the estate tax but replace it with what looks like a capital gains tax at death. That is a 20% tax bite instead of a 40% one.  If estate tax repeal happens, it would be a tremendous game changer to the rich. Based on recent IRS statistical data for estate tax returns filed in 2015, 1956 estates were valued at more than $10 million, and the total amount of estate tax paid was $17 billion, but just by 4918 estate estates.

Need Legal Assistance?

By putting in some time now and consulting with an experienced estate planning attorney you can help ensure that your estate tax planning needs and goals are met. Please contact the knowledgeable estate planning attorneys at Kira Doyle Law today at (727) 537-6818.