Each individual person has a federal gift and estate tax exemption of $5.45 million. A person can use this exemption during their lifetime, after they die, or both if not all of it is used as gifts during that person’s lifetime. “When determining how best to make use of this exemption, make sure you consider – among other things – the federal income tax basis of any property you want to transfer during lifetime.” This article provides one of many examples of how a taxpayer can effectively use the estate and gift tax exemption. When conducting this type of planning it is important to take all the moving parts of an estate into consideration. It is a good idea to meet with a trust and estate attorney to go over any existing estate plans.
See Dana Reid, Effectively Utilize Your Combined Federal Gift and Estate Tax Exemption, Family Business Resource Center, February 29, 2016.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.
