celebrex alcohol

2018 Gift and Estate Tax Planning

January 23, 2018 Uncategorized Comments Off on 2018 Gift and Estate Tax Planning

2018 Gift and Estate Tax Planning

Recent tax legislation has produced two significant changes regarding estates and trusts that will take effect in 2018:

  1. $15,000 annual gift tax exclusion: $1,000 increase from the previous years’ exemption total
  2. $11,200,000 estate, gift, and generation-skipping tax exemption: doubled from the previous year’s exemption total

Here’s what the recent increase in the exclusion may mean for you, including how annual gift-giving can lower your taxable estate.

Filing Requirements

A gift tax return is required if you give more than $15,000 ($14,000 in 2017) in cash, property, and gifts to an individual other than your spouse. Form 709 is used to report transfers subject to the Federal gift and certain generation-skipping transfer (GST) taxes, and to figure the tax, if any, due on those transfers. The simplest way to subsidize others is by using the annual exclusion, which allows you to give $15,000 in cash or other assets each year to each of as many individuals as you want. Spouses can combine their annual exclusions to give $30,000 to any person tax-free – a process called gift-splitting.

The deadline for gift tax returns is April 15 of the year following the year of the gift, the same as the due date for personal income tax returns. (The deadline is moved to the next business day if it falls on a weekend or holiday.) So, for gifts made in 2017, you must file a gift tax return by April 17, 2018. However, if you extend your federal income tax filing to October 15, 2018, the extension also applies to your gift tax return.

Lifetime Estate and Gift Tax Exemption

A gift above the annual gift tax exemption amount reduces your lifetime estate and gift tax exemption. For 2018, the lifetime estate and gift tax exemption increased to $11,200,000 per individual.

Gifting Exemptions

There are exceptions to annual gifting limitations:

  • Gifts from one spouse to the other spouse,
  • Gifts to a qualified charitable organization,
  • Gifts made directly to a health care provider for medical reasons, and
  • Gifts made directly to an educational institution for a student’s tuition.

 Effect of Tax Reform

President Trump’s vow to kill the federal estate tax failed. Congressman in the House and Senate could not agree on a method to repeal the estate tax so they doubled the exemption instead.  The higher exemption amount is good for tax years 2018 to 2025.  For 2018, the lifetime estate and gift tax exemption is $11,200,000 per individual.  Far fewer estates will be subject to the tax — the Joint Committee on Taxation estimates the number of taxable estates would drop from 5,000 under current law to 1,800 under the new law in 2018. By comparison, 52,000 estates paid the tax in 2000 when the exemption was $675,000.

 Planning Ahead

Estate planning is a critical component of your financial plan. There are many planning opportunities available to assure that you maximize the transfer of wealth to your chosen beneficiaries and minimize the amount of estate taxes paid at death. Please contact us for a consultation; we will work with your family’s attorney or can recommend one that will provide excellent service and creative solutions to your estate planning issues.


Sorry, you can not to browse this website.

Because you are using an outdated version of MS Internet Explorer. For a better experience using websites, please upgrade to a modern web browser.

Mozilla Firefox Microsoft Internet Explorer Apple Safari Google Chrome