By Jacqueline L. Messler
The IRS has announced the 2017 inflation adjusted numbers for several important gift and estate tax exclusions. Each year, several key gift and estate tax exclusions are adjusted for inflations, including the estate tax exclusion, the annual gift tax exclusion, and the estate tax deduction for decedents dying with certain farm or closely held business real estate. In 2017, the estate tax exclusion is $5,490,000. That means for people dying in 2017, because the gift tax and estate tax are unified, a person can make a total of up to $5.49 million of taxable gifts without paying gift tax or transfer up to $5.49 million of assets at death without paying estate tax. Further, if a person dies in 2017 owning certain farm and closely held business real property, the executor of the decedent’s estate may select to value the property at its farm or business use value rather than its fair market value. For 2017, the tax law authorizes a deduction that can reduce the fair market value of the decedent’s qualified property not more than $1,120,000. The annual per donee gift tax exclusion will remain at $14,000. It has held steady at $14,000 since 2013. That means in each year, any person can give to any other person up to $14,000 without having any obligation to file a gift tax return or use any of the combined gift and estate tax exclusion. Finally, the standard mileage rates for the use of a car (also vans and pickups), which can be reimbursed by an employer, or if not, deducted on the income tax return, will be 53.5 cents per mile for business miles driven, which is slightly reduced from the rate of 54 cents per mile for 2016.
If you have any questions, please contact your Davis & Kuelthau attorney, or the author, Jacqueline Messler, at 262.792.2409 / firstname.lastname@example.org.