Considering Gifting to Reduce Estate Taxes?
Column distributed by Hearst Connecticut Media Group.
Links to resources referenced:
- Internal Revenue Service, “Estate tax,” August 22, 2024.
- https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax
- Related column excerpt:
- “The exemption for federal estate taxes in 2024 is $13,610,000 per person, which is up from 2023’s $12,920,000.”
- Internal Revenue Service, “Estate and Gift Tax FAQs,” September 13, 2024.
- https://www.irs.gov/newsroom/estate-and-gift-tax-faqs
- Related column excerpt:
- “However, the TCJA was not designed to be permanent. In 2026, the exclusion amount ‘is due to revert to its pre-2018 level,’ quoting the IRS Estate and Gift Tax FAQs.
- “According to the IRS Estate and Gift Tax FAQs: ‘[P]eople planning to make large gifts between 2018 and 2025 can do so without being concerned that they will lose the tax benefit of the higher exclusion level once it decreases.’”
- Northern Trust, “Are You Prepared for Sunsetting Estate Tax Exemptions?” 2024.
- https://pages.e.northerntrust.com/wm-exemption-expiration-gate.html?utm_medium=native&utm_source=dianomi&utm_campaign=wmnational_grp-us-leadgen-insights-20240517&utm_content=dianomi_estate_tax
- Related column excerpts:
- “The inflation-adjusted exemption for 2026 will, ‘barring action by Congress … revert to approximately $7 million per individual, adjusted for inflation,’ according to the Northern Trust Institute report ‘Are You Prepared for Sunsetting Estate Tax Exemptions?’”
- “For starters, don’t wait, according to the Northern Trust Institute: ‘Begin planning for any wealth transfer well ahead of the expected 2026 reduction in estate tax, gift tax and GST [generation skipping transfer] exemption amounts.’ The report also warns that lawyers, accountants and other professionals ‘who can help you analyze your options will also be under time pressures,’ adding that ‘starting early can reduce that pressure.’”
- Husch Blackwell LLP, “Understanding the 2026 Changes to the Estate, Gift, and Generation-Skipping Tax Exemptions,” June 13, 2024.
- https://www.huschblackwell.com/newsandinsights/understanding-the-2026-changes-to-the-estate-gift-and-generation-skipping-tax-exemptions
- Related column excerpts:
- “‘The federal gift tax exemption is unified with the federal estate tax exemption, meaning that an individual can use part of their lifetime gift tax exemption to make taxable gifts during their lifetime and the remaining portion to shelter their estate from federal estate tax after they pass away,’ according to the law firm Husch Blackwell LLP in ‘Understanding the 2026 Changes to the Estate, Gift, and Generation-Skipping Tax Exemptions.’”
- “‘Whenever a portion of the federal gift tax exemption is used, the amount must be reported to the IRS on a Form 709 (Gift Tax Return) the following year.’”