In 2023, you can give away more…
• The amount you can give away (gift exemption) without owing any federal gift tax is the highest it has ever been – $12,920,000.
• However, President Biden campaigned on raising taxes and has proposed to tax the transfer of property as low as $3,500,000 at a rate of 45%. Even without enacting this proposal, in 2026 the exemption is lowered to $5,000,000 (indexed).
• President Biden has also proposed to levy a capital gains tax as high as 39.6% on unrealized appreciation on assets passed at death.
• Therefore, this may be the last year you can pass on so much to whomever you wish and pay nothing in federal gift taxes.
Is Gifting For You?
• Do you have assets you can afford to give away now?
• Then you can benefit from this estate tax reduction strategy.
Why Gift as part of an estate plan?
• The gift and the growth on the gifted assets are outside of your estate.
• The larger your gift today the more you can shelter from taxes because of the larger federal exemption amount available today.
• Result: More passes to the people you want, and you pay less in federal taxes.
• But, what kind of asset should you gift?