Annual Gift Tax Exclusion Jumping to $12,000 Next Year

The annual gift tax exclusion will increase from $11,000 to $12,000 effective January 1, 2006, tax experts are reporting. The gift tax exclusion is the amount the Internal Revenue Service allows a taxpayer to gift to another individual without reporting the gift. The increase means that more can be given away for estate tax planning purposes. For example, a married couple with four children will be able to give away up to $96,000 in 2006 with no gift tax implications. The tax code permits the gift tax exclusion, which has remained at $11,000 since 2002, to rise when inflation would produce an increase of $1,000 or more. This year's inflation figures will push the amount above the next $1,000 threshold. The IRS is expected to officially announce the change by December.

For more on this and other inflation-adjusted tax figures for 2006 from CCH Inc., go to: http://www.cch.com/press/news/2005/20050921t.asp

Disclaimer — This web site is intended, but not promised or guaranteed, to be correct, complete or up-to-date. It is not intended to be a source of legal advice; thus the reader should seek out specific advice, based on the reader's age, assets, state of health, etc. from competent counsel. Ettinger Law Firm does not intend links on this web site to be referrals or endorsements of the linked entities.