IRS Releases 2015 Annual Inflation Adjustments for Estate and Gift Tax Exclusions

By: Jason Palmisano

The Internal Revenue Service has released the exclusion amounts related to estate and gift taxes for 2015:

  • Estates of decedents who die during 2015 have a basic exclusion amount of $5,430,000 (up $90,000 from $5,340,000 for estate of decedents who died in 2014).
  • The annual exclusion for gifts remains at $14,000 for 2015.

Remember, the basic exclusion amount of $5,430,000 (for 2015) is a unified credit for both lifetime taxable gifts and the estate tax.  Therefore, any taxable gifts you make during your lifetime will reduce the exclusion amount remaining at your death for the estate tax.  For example, if you give away a total of $1,000,000 in taxable gifts to beneficiaries during your lifetime and you pass away in 2015, then the exclusion amount available to your estate for the U.S. federal estate tax will be reduced from $5,430,000 to $4,430,000 ($5,430,000 – $1,000,000).

There are more than 40 additional tax provisions that the Internal Revenue Service adjusted due to inflation, including the child tax credit, income tax rate tables, and the personal exemption.  You can find the adjustments for 2015 in Revenue Ruling 2014-61.

If you have any questions, feel free to contact any member in our firm’s Estate Planning Group.

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