How Form 2350 Exclusion 2023-2024

Hello again! Paul Rabelais here. As we're wrapping up 2018 and moving into 2019, I wanted to give you an update on the 2019 gift and estate tax rules, along with some analysis on those rules. So let's jump right in. First, let's start with the very basics. The annual exclusion amount for 2018 was $15,000. For 2019, it will remain $15,000. While it goes up by $1,000, it is adjusted for inflation and stays at $15,000 every few years. The other number to note is the gift and estate tax exclusion amount. For 2018, it was $11.18 million, but many people referred to it as $11.2 million. In 2019, it will increase slightly to $11.4 million. Now, let's take a closer look at these numbers and what they mean. Starting with the annual exclusion amount of $15,000, it's important to note that people often misunderstand it. Many think that any gift exceeding $15,000 is subject to taxes. However, this is not the case. For example, let's say a father wants to help his daughter buy a house and decides to give her $115,000. Although this gift exceeds the annual exclusion amount, no taxes are owed. The father is simply required to report the gift on a special tax return called Form 709. This allows the IRS to track the gift, but no taxes are owed. By making this $100,000 gift, the father has used up a portion of his $11.4 million estate tax exclusion. If he were to pass away after making this gift, he would only be able to shield $11.3 million from the 40% estate tax, instead of the full $11.4 million. It's also important to note that married couples have the ability to transfer $15,000 each without tax consequences or reporting requirements. This means that they can donate up to $30,000 to...