IRS Announces Inflation-Adjusted Estate and Gift Tax Exclusion Amounts for 2015
The Internal Revenue Service has announced that the 2015 federal estate and gift tax exclusion amount will increase by $90,000, from $5,340,000 to $5,430,000 per person. This represents how much, in the aggregate, an individual can transfer during life and at death without having to pay a federal estate and gift tax. The generation-skipping transfer tax exemption tracks the estate and gift tax exclusion and therefore it too will rise to $5,430,000. These amounts are adjusted annually based on inflation.
The so-called “annual exclusion” amount for gifts will remain at $14,000 for 2015. This means that the first $14,000 of gifts to any individual in a given year are not considered “taxable gifts” and therefore do not reduce the federal estate and gift tax exclusion.
The first $147,000 of gifts to a spouse who is not a U.S. citizen is not considered a taxable gift. This is up from $145,000 in 2014.
The Massachusetts estate tax threshold remains at $1,000,000 and is not adjusted for inflation. Massachusetts does not impose a gift tax.