Filing estate tax return and electing portability when first spouse dies could eliminate future estate tax if the gift and estate tax exemption drops.
2022 Estate and Gift Tax Exemption
2022 gift and estate tax exemption and annual gift exemption.
After all the noise last year about how the new Congress and President Biden were going to lower the gift and estate tax exemption, it didn't happen.
President Trump's gift and estate tax exemption remains the law.
The 2022 Gift and Estate Tax exemption is $12,060,000 per person, up from $11,700,000 in 2021. And the tax rate on estates over the exemption amount remains at 40%.
The 2022 annual gift exemption is $16,000, up from $15,000 in 2021.
In 2010, President Obama raised the gift and estate tax exemption to $5,000,000, indexed for inflation.
In 2017, President Trump doubled the gift and estate tax exemption to $10,000,000, also indexed for inflation, but Trump's exemption is scheduled to disappear at the end of 2025, unless Congress and the President make it permanent.
If Trump's exemption sunsets at the end of 2025, the gift and estate tax exemption will default to Obama's exemption, which is estimated to be around $7,000,000 ($5,000,000 indexed for inflation since 2011).
FYI. I'm talking about the federal gift and estate tax. Unlike some states, California does not have a state estate tax. California has very high taxes while you are alive, but it has no estate tax when you die.
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