OVERVIEW OF FEDERAL GIFT & ESTATE TAXES

OVERVIEW OF FEDERAL ESTATE & GIFT TAX 2020

  • 40% tax rate.​

  • Unlimited estate and gift tax marital deduction for U.S. citizens.

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  • Estate and gift tax exemption of approximately $11,580,000 (indexed periodically for inflation).

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  • The increased exemption is scheduled to expire on December 31, 2025 (but may disappear earlier), when the exemption amount will be reduced to $5,000,000 (indexed for inflation).  Wealthy donors should consider taking advantage of the increased exemption while it is still available.

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  • Portability enables a surviving spouse whose spouse died on or after January 1, 2011 to utilize the unused portion of the deceased spouse’s federal estate and gift tax exemption if certain requirements are met.

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  • $15,000 per year gift tax exclusion (indexed periodically for inflation).

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  • Gift tax exclusion for direct tuition and medical payments.

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  • Lifetime and at-death transfers to qualified charity are gift and estate tax free. 

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  • Noncitizen spouse annual gift tax exclusion amount of $157,000.