The IRS recently announced the inflation-adjusted items for 2016, including gift, estate, and generation-skipping transfer tax amounts. The following adjustments should be considered in your estate and gift planning:

  • The gift tax annual exclusion for 2016 remains $14,000 (and is increased to $148,000 for gifts to a non-U.S. citizen spouse).  Married couples who elect gift splitting may give $28,000 per donee in 2016.
  • The gift, estate and generation-skipping transfer tax exemption amount is increased to $5,450,000 in 2016.
  • Direct payments of qualified tuition and medical expenses remain gift-tax free in unlimited amounts.

A complete copy of the Revenue Procedure 2015-53 announcing the inflation-adjusted items for 2016 can be found here.