Ep. 10: 2023 Federal Estate And Gift Tax Basics

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If you give gifts on an annual basis, its important to know the rules to avoid ending up crossways with the Internal Revenue Service.

For those with large estates, there is an exciting opportunity to do some planning prior to the sunset provisions kicking in on January 1, 2026, which will substantially change the laws.

While todays discussion focuses on federal law, its important to know what applies to you on the state level.

Each of our 50 states can, if they wish, impose their own estate tax, inheritance tax, or gift tax. In 2023, there are 12 states with an estate tax. This means when a person dies, the government levies a percentage tax on the assets that are owned at death.

Six states have an inheritance tax, which taxes the person receiving the inheritance rather than the actual estate. The good is that there is only one state, Connecticut, which has a gift tax.

With all that in mind, how can you navigate the often-confusing federal gift tax laws, particularly when it comes to the annual exclusion gift” and the lifetime exemption amount?” Finally, what planning opportunity can you take advantage of between now and December 31, 2025? Listen in and find out!

Key Topics:

  • State laws concerning estate, inheritance, and gift taxes (0:58)
  • Federal law, the “annual exclusion gift,” and the “lifetime exemption amount” (3:34)
  • What to expect when the sunset provisions kick in on January 1, 2026 (8:11)
  • A planning opportunity to consider prior to December 31, 2025 (9:59)
  • Which assets can be transferred into a trust? (12:43)
  • Transferring an unlimited amount of money for medical expenses or for tuition (16:40)
  • Fair market value determines your gift amount (19:43)
  • Closing thoughts (21:03)


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