Estate, Gift and Generation Skipping Transfers Tax Exemptions 2017 Update

Estate, Gift and Generation Skipping Transfers Tax Exemptions 2017 Update

Federal Estate Tax

The estate tax exclusion for 2017 has been raised from

  • $5.45 million for individuals and $10.9 million for married couples in 2016
  • to $5.49 million for individuals and $10.98 million for married couples in 2017. (See IRC §2001)

The maximum estate tax rate applied to amounts exceeding the exclusion remains unchanged from 2016 at 40%. (See IRC §2010)

Federal Gift Tax

The annual gift tax exclusion remains unchanged from 2016 at $14,000.00. (See IRC §2503(b)(2))

The maximum gift tax rate for amounts exceeding the exclusion remains unchanged from 2016 at 40%. (See IRC §2502(a))

Lifetime gift exclusion for 2017 increases to $5.49 million from $5.45 million in 2016. (See IRC §2001)

Annual gift exclusions for gifts from U.S. citizens/U.S. residents to Non U.S. citizen spouses increases from $148,000.00 for 2016 to $149,000.00 for 2017. (See IRC §2503 and §2523)

Reporting threshold for reporting foreign gifts and/or inheritances remains the same for 2017 at $100,000.00.

Federal Generation-Skipping Transfers Tax

The maximum tax rate for generation skipping transfers remains unchanged at 40% and the exclusion amount increases to $5.49 million for 2017.

Miscellaneous

The foreign earned income exclusion increases from $101,300.00 for 2016 to $101,300.00 for 2017.

State Estate and Gift Tax

California abolished its estate tax in 2005 and currently does not impose a separate estate tax at the state level. Further, California does not have a separate gift tax. Accordingly, California residents are only subject to the federal estate tax. Several large states including New York, New Jersey, Illinois, Massachusetts and Ohio still impose a separate estate tax at the state level. 

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