Inflation-Adjusted 2015 Figures for Estate and Gift Taxes

12/5/2014

A number of tax figures are adjusted each year for inflation; for 2015, the most significant adjustments for estate and gift taxes are:

Unified estate and gift tax exclusion amount. For gifts made and estates of decedents dying in 2015, the lifetime exclusion amount will be $5,430,000 individually or $10,860,000 per couple (up from $5,340,000 or $10,680,000 per couple for 2014).

Generation-skipping transfer (GST) tax exemption. The exemption from GST tax will be $5,430,000 for transfers in 2015 (up from $5,340,000 for transfers in 2014).

Gift tax annual exclusion. For gifts made in 2015, the gift tax annual exclusion will be $14,000 (same as for gifts made in 2014).

Reporting foreign gifts. If the value of the aggregate “foreign gifts” received by a U.S. person (other than an exempt Code Sec. 501(c) organization) exceeds a threshold amount, he or she must report each “foreign gift” to the IRS on a Form 3520 included with the individual’s income tax return. For gifts from a nonresident alien individual or foreign estate or trust, reporting is required if the aggregate amount of gifts from that person exceeds $100,000 during the tax year.

Planning Note. Because the estate exemption has increased to $10,860,000 per couple, many wills and estate plans can be simplified, especially those prepared before 2009, when the exemption was significantly lower. Some clients might consider revising their estate plans to make an outright bequest to a surviving spouse rather than establish one or more trusts for the spouse. On the other hand, trusts provide benefits and advantages other than tax savings, and it could be in the best interest of a surviving spouse and/or other family members to maintain or to add certain trusts for the benefit of a surviving spouse or other family members.

If you desire to simplify your estate planning documents or to discuss the various alternatives arising from these changes in the 2015 inflation amounts, please contact one of the attorneys listed below.

To ensure compliance with requirements imposed by U.S. Treasury Regulations, Haynes and Boone, LLP informs you that any U.S. tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

*Board Certified – Estate Planning and Probate Law and Tax Law by the Texas Board of Legal Specialization.

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