Tax Update: New Transfer Tax Exemptions and Rates

It is important to consider transfer tax exemption amounts and income tax rates with regard to your estate planning.  Many of the Federal tax exemption amounts and rates are adjusted annually to reflect cost-of-living increases, typically measured by the Consumer Price Index released by the Labor Department.  The following figures for 2019 were recently published:

Estate and gift tax exclusion amount. For gifts made and estates of decedents dying in 2019, the exclusion amount will be $11,400,000 (up from $11,180,000 for gifts made and estates of decedents dying in 2018).

Generation-skipping transfer (GST) tax exemption. The exemption from GST tax will be $11,400,000 for transfers in 2019 (up from $11,180,000 for transfers in 2018). 

Gift tax annual exclusion. For gifts made in 2019, the gift tax annual exclusion will be $15,000 (same as for 2018).

Annual exclusion for gifts to noncitizen spouses. For gifts made in 2019, the annual exclusion for gifts to noncitizen spouses will be $155,000 (up from $152,000 for 2018).

Estate and Trust Income Tax rate schedules. The tax rate schedules for 2019 will be as follows.

If taxable income is: The tax is:
Less than $2,600 10% of taxable income
Over $2,600 but not over $9,300 $260 plus 24% of the excess over $2,600
Over $9,300 but not over $12,750 $1,868 plus 35% of the excess over $9,300
Over $12,750 $3,075.50 plus 37% of the excess over $12,750

Kiddie tax. The exemption from the kiddie tax for 2019 will be $2,200 (up from $2,100 for 2018). A parent will be able to elect to include a child’s income on the parent’s return for 2019 if the child’s income is more than $1,100 and less than $11,000 (up from $1,050 and $10,500 for 2018).

To learn more about tax changes that may affect your estate planning, please contact Bill Pearson at wpearson@gfpac.com or call him at 239-514-1000.

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Bill Pearson is a founding member of Grant Fridkin Pearson, P.A. and has practiced law in South Florida since 1988. He has an AV rating from Martindale-Hubbell. Bill focuses his practice on representing individuals in their estate planning, representing fiduciaries in the administration of estates, trusts and guardianships, representing fiduciaries and beneficiaries in disputed matters involving estates, trusts and guardianships, advising clients in the avoidance and minimization of estate, gift and generation-skipping transfer taxes, and in charitable planning.

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