FEDERAL

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Estate & Gift Tax Applicable Exclusion.

Under current law, at the federal level, the amount that can be passed FREE of Federal tax is currently set at $11,700,000 per individual.  At the federal level, "portability" is recognized between spouses.  Meaning, so long as one spouse does not use all of their exemption amount ($11.7 M) at the time of death, such amounts can be transferred to their surviving spouse.  

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Annual Gift Tax Exclusion.

Each year, you can gift as much as you want to practically anyone you want.  However, if the amount of the gift in any given year to one single person exceeds $15,000, then you will need to file a gift tax return (IRS Form 709).  A common misconception that a gift in excess of $15,000 to any one person in a calendar year is subject to tax (the above and over amount).  This is not true.  Your exclusion amount is $15,000 meaning anything above and over that in the calendar year will impact your total applicable exclusion at $11,700,000 per individual. 

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Generation-Skipping Tax Exemption. 

Under current law, at the federal level, the amount that can be passed FREE of federal tax is currently set at $11,700,000 per grandchild or other defined "skipped persons."  The purpose of this exemption is if the parents of the grandchildren predecease them, the grandchildren will not be subject to estate tax for inheritance purposes should it not exceed the thresholds mentioned above.

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STATE

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Gift Tax in New York. 

Under current law, New York does not impose a gift tax.  However, in New York, gifts made during the preceding three-year period before the decedents date of death will be added back into the estate of that New York resident.  

 

New York Estate Tax.

Under current law, in New York, the amount that can be passed FREE of State estate tax is currently $5,930,000 per individual.  Unlike the Federal level, New York does not recognize portability among spouses meaning each spouses independently and individually has their exemption amount which cannot be transferred at death.  

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Tax rates are calculated through the NY Form-706 with the highest rate remaining at 16% in 2021.