November 7, 2017
On October 19, 2017, the Internal Revenue Service issued Revenue Procedure 2017-58 setting the 2018 inflation adjusted amounts for various tax provisions. This included an increase to $15,000.00 in the annual exclusion amount for gifts. The annual gift exclusion has been set at $14,000.00 since 2013.
Annual exclusion gifts are the amount a person can give away to one person in one year without having to report the gift to the IRS. If more than the annual exclusion is given to one person in one year, the gift must be reported by filing a gift tax return. However, a gift tax is only paid if the individual making the gift has exceeded the basic exclusion amount for gift and estate tax purposes. The basic exclusion amount for 2018 will be $5,600,000.00.
Planning with annual exclusion gifts can be an effective way to reduce potential estate tax liability. To learn more about this kind of planning, contact one of the Wealth Preservation professionals at RCO Law.