The IRS recently announced the new exemption limits for the federal estate tax and gift tax exclusion. In 2016 the estate tax exemption will be $5.45 million for an individual which is an increase $20,000 over the 2015 limit of $5.43 million. For couples, the exemption will be $10.9 million and the yearly gift tax exclusion will remain unchanged from the previous year at $14,000. In 2011, the U.S. Congress changed the tax estate and gift tax system by indexing exemptions to inflation as well as setting the top estate tax rate at %40. However, these tax rates may be subject to change following the 2016 elections due to the strong political pressure to see the tax increased or abolished depending on party affiliation.
See Ashlea Ebeling, IRS Announces 2016 Estate And Gift Tax Limits: The $10.9 Million Tax Break, Forbes, October 22, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
