New IRS 2016 Limits for Federal Estate and Gift Tax Exemptions; Tennessee Inheritance Tax Abolished in 2016

Posted on Jan 3 2016 4:35PM by Attorney, Jason A. Lee

The IRS recently introduced new cost of living adjustments to the lifetime federal estate and gift tax exemption.  The new federal estate and gift tax exemption will be $5.45 million dollars in 2016.  This is an increase from the prior exemption of $5.43 million for 2015.  This is therefore an increase of $20,000.00 that can be passed on by gift or in your estate, tax free starting in 2015. 


Unfortunately, the annual tax free gift exclusion amount stays at the same level at a total of $14,000.00.  This is the annual amount of gifts that can be given to an individual without counting toward the lifetime consolidated exemption of $5.45 million for 2016.  As a result, each year you can give up to $14,000.00 to an individual using the annual gift tax exclusion.  These gifts will not count towards your lifetime exemption amount.


As I have stated before on this blog, estate taxes are becoming less relevant to the vast majority of Americans due to the “permanent” fix that was provided by the federal government a few years ago.  The estate tax simply does not come into play for most people.  Additionally, the Tennessee inheritance tax is now abolished in Tennessee for any person who dies in 2016 or later.  It simply does not exist any longer. 


Follow me on Twitter at @jasonalee for updates from the Tennessee Wills and Estates blog.

TAGS: Tennessee Inheritance Tax, Taxes, Federal Estate Tax
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Jason A. Lee is a Member of Burrow Lee, PLLC. Contact Jason at 615-540-1004 or jlee@burrowlee.com for an initial consultation on wills estate planning and probate issues.

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Tennessee Wills and Estates Blog
Jason A. Lee, Member of Burrow Lee, PLLC
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Phone: 615-540-1004
E-mail: jlee@burrowlee.com