The IRS has announced that the basic estate tax exclusion amount for the estates of decedents dying during calendar year 2016 will be $5.45 million, up from $5.43 million for calendar year 2015. This figure is in line with earlier projections. The annual gift tax exclusion will remain at $14,000 for 2016.
Also, if the executor chooses to use the special use valuation method for qualified real property, the aggregate decrease in the value of the property resulting from the choice cannot exceed $1,110,000, up from $1,100,000 for 2015.
The increase in the estate tax exclusion means that the lifetime tax exclusion for gifts should also rise to $5.45 million, as will the generation-skipping transfer tax exemption.
Patrick C. Smith, Jr., Esq.
The Smith Law Firm, P.C.