IRS Announces Changes to Federal Transfer Tax Exemption

Transfer Tax ExemptionThe IRS recently published Rev. Proc. 2014-61, which announces the annual inflation adjustments for certain federal tax provisions for 2015.  Among many other adjustments, the federal estate, gift and generation-skipping transfer tax exemption was increased from $5.34 million to $5.43 million.  Accordingly, the estate of a person dying in 2014 will only incur federal estate tax if the value of the person’s assets exceeds $5.43 million, adjusted for prior taxable gifts.  The gift tax annual exclusion did not change, and remains at $14,000.  Any individual may gift $14,000 to any other individual without paying federal gift tax or filing a federal gift tax return.