Estate Taxes for 2016

James Zakasky
An estate attorney who goes beyond drafting wills and creating trusts

2016 Estate Tax

The Federal Estate Tax deduction or the amount that you can keep from the transfer of property that someone leaves to you after they die in the year 2016 is $5,450,000.00. Anything over that amount is taxed at 40%!

For Example: if your Mother leaves you $10 Million Dollars than the first $5.45 Million is exempt but the remaining $4.55 Million would be taxed at %40 which would leave you a tax bill of $1,820,000.00.

Federal Tax Exemption Table

Year                                                                                                                       Exemption Amount

2015                                                                                                                       $5,430,000.00.

2014                                                                                                                       $5,340,000.00.

2013                                                                                                                       $5,250,000.00.

2010-2011                                                                                                            $5,000,000.00.

2009                                                                                                                       $3,500,000.00.

2006-2008                                                                                                            $2,000,000.00.

2004-2005                                                                                                            $1,500,000.00

The Federal Gift Tax Exemption

The Federal Government allows gifts of property to family members and loved ones in the amount of $14,000.00 Dollars per year per spouse for tax year 2016.

For Example: You can give your grandson $14K without having to pay a tax on the gift and he will not have to pay a tax on the amount that he receives in tax year 2016. If you die within the next three years that amount and all gifts that you made within the last three years will be added and deducted from the total Exemption Value of $5.45 Million. So if you gave One Million in Gifts that Million will be reduced from the overall exemption leaving you only $4.45 Million left in Exemptions.

Federal Gift Tax Exemptions

Year                                                                                                        Federal Gift Tax Exemption

 2013-2016                                                                                                         $14,000.00

2009-2012                                                                                                          $13,000.00

2006-2008                                                                                                          $12,000.00

2004-2005                                                                                                           $11,000.00