To "Gift" or "Not to Gift"
IMPORTANT FACTS TO CONSIDER
NJ Residents USED TO BE subject to 3 Estate Taxes
• NJ Estate Tax
• NJ Inheritance Tax
• Federal Estate and Gift Tax Exemption
Will your Estate be taxable?* Today there is NO New Jersey Estate Tax. The NJ Estate Tax was eliminated as of January 1, 2018.
* The New Jersey Inheritance Tax is STILL IN EFFECT. This is a tax imposed on transfers to beneficiaries who are NOT spouses, parents, children or grandchildren (i.e., nieces, nephews, siblings, friends, etc.) New Jersey Inheritance Tax rates start at 11% and go as high as 16%.)
* The Federal (Internal Revenue Service): The official estate and gift tax limits for 2019: The estate and gift tax exemption is $11.4 million per individual, up from $11.18 million in 2018. That means an individual can leave $11.4 million to heirs and pay NO FEDERAL ESTATE OR GIFT TAX, while a married couple will be able to shield $22.8 million.
* The lifetime gift tax exemption for gifts made during 2019 is $11,400,000. The top marginal rate remains 40 percent. The gift tax annual exclusion amount remains $15,000. The annual exclusion for gifts made to non-US citizen spouses in 2019 is $155,000.
PLEASE NOTE: When you transfer real estate property to another person or legal entity (e.g., trust, LLC, etc.) by Quitclaim Deed, the fair market value of the percentage ownership transferred may be considered a GIFT for tax purposes.
For the ultra rich, these numbers represent planning opportunities. For everybody else, they serve as a reminder: Even if you don*t have a taxable estate, you still need an estate plan.
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