The annual exclusion gifts don’t count towards the lifetime gift exemption. So a couple could make $14,000 gifts to each of their four grandchildren, for a total of $112,000.

A husband and wife can each make $14,000 gifts. You can give away $14,000 to as many individuals as you’d like. Totally separate from the lifetime gift exemption amount is the annual gift tax exclusion amount. Must Read: 21 Secrets To Maxing Out Your Social Security The problem is if you don’t know what portability is and how to elect it, you could be hit with a surprise federal estate tax bill. But to use your late spouse’s unused exemption – a move called “portability”-you have to elect it on the estate tax return of the first spouse to die, even when no tax is due. An unlimited marital deduction allows you to leave all or part of your assets to your surviving spouse free of federal estate tax. Sure a husband and wife can each get their own exemption, meaning a couple will be able to give away $10.9 million tax-free in 2016 (assuming they haven’t made prior lifetime gifts), but it’s not automatic. So a woman who set up a trust for her kids with $5 million a few years ago could make new gifts to add to the trust and bring it up to the $5.45 million amount.ĭon’t let the $10.9 million number fool you. You can make the gifts during your lifetime just you have to keep track of them as they count against the eventual estate tax exemption amount. The federal gift tax is tied to the estate tax, so the inflation indexing helps the wealthy make the most of tax-free lifetime giving too. In the meantime, there’s been action to reduce state estate and inheritance tax levies, with eight states ushering in changes for 2016 (see Where Not To Die In 2016). 860, next spring, but any real chance of repeal would come in 2017 after the next Presidential election. The Senate may vote on its own repeal bill, S. In April, the House voted to kill the estate tax 240-179, with 7 Democrats joining. Meanwhile Republican candidates are toeing the party line for repeal (see who has signed on to the Family Business Coalition's death tax repeal pledge). Bernie Sanders (I-Vt.) is calling for a “Responsible” estate tax with a $3.5 million exemption and a 65% top estate tax rate. What’s next for the estate tax? Democratic presidential candidate Sen.

Ct estate tax table for 2016