PSED Law Educate Clients on What Will Happen When Gift and Estate Tax Exemption Gets Cut in Half

ANN ARBOR, Mich. - March 6, 2023 - PRLog -- Most Americans have estates that fall under the federal estate and gift tax exemption. However, the exemption is set to be cut in half in 2026. This exemption increased to $13 million (actually $12.92 million) in 2023. In 2026, this exemption resets to $6.8 million (adjusted for inflation between now and then) unless Congress acts in the interim. What happens if you make a taxable gift before 2026 but die after 2026 when the exemption has been cut in half?

The annual gift tax exclusion is $17,000 in 2023. This means annually you can give $17,000 to as many individuals as you like without filing a gift tax return. But if you give anyone more than $17,000 per year, you'll need to report the excess on a gift tax return. It's unlikely that you'll have to pay any tax because the gifts are only taxed when they cumulatively reach the $13 million exemption.

For example, If you give your child $2 million in 2023, you'll have to report a taxable gift of $2 million. If you die before 2026, your estate tax exemption will be $11 million ($13 million exemption - $2 million gift) instead of $13 million.

Learn more about what will happen when the gift and estate tax exemption gets cut in half here (https://www.psedlaw.com/learn/more/gift-estate-planning-a...).

Need help from an expert family law or estate planning attorney in Ann Arbor? Pear Sperling Eggan & Daniels, P.C. can discuss your case and help you decide your needs.

About Pear Sperling Eggan & Daniels, P.C.: Pear Sperling Eggan & Daniels, P.C. is one of the oldest law firms in Washtenaw County, Michigan. Founded in 1948, Pear Sperling has adapted with the ever-changing needs of clients and flourished into a well-respected and successful law firm, trusted by clients, judges and other attorneys. Top Rated Michigan Superlawyers^®, AV^® rated, and their attorneys are held to the highest rating possible based on peer review. https://www.psedlaw.com