The Tax Rules, Credits, And Exclusions

983 WordsOct 25, 20154 Pages
The tax rules, credits, and exclusions that are applicable to gift and to estates are continuously changing. As a result, one needs to be conscious of these changes so that effective tax reduction plans can be applied to a given event or situation. Although there are many estate planning concepts and provisions from a taxation perspective these concepts are two expansive and often to specialized to be covered all at once or to be relevance to a wide audience. Having said this, it is important to note that there are some foundational concepts that taxpayers and estate planners should be aware of as well as their most up-to-date application. Some of these concepts along with figures relevant to the 2015 tax year are listed below. 1. Federal Unified Credit Exemption: The Unified Federal Credit exemption allows for non-taxable transfers, through gifts during one’s lifetime or through estates upon ones death, up to a specified dollar value (Daily & Quinn, 2014). This value often increases, similar to the level of inflation, so that the exemption does not become diluted. In 2015 the Unified Federal Credit exemption was increased from $5.34 million to $5.43 million dollars (Jacobs, 2014). 2. NYS Unifies Exemption Amount: comparable to the federal credit exemption, the state exemption accomplishes the same purposes. Each state has difference estate tax rates and rule. For NYS the exclusion amount for the 2015 tax year is $3,125,000.00 with an annual increase of roughly 1,000,000

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