If you are planning to give away any money or any property, it is helpful to know the gift tax lifetime exclusion. Understanding the rules for gift taxes can be complicated, but you need to know how both state laws and federal laws work to tax transfers of your assets. You do not want to make an inter vivos gift during your life, or a post humous gift after your death, only to find that a substantial tax bill dramatically reduces the value of the gift that you have provided.
Mark S. Eghrari & Associates PLLC can help you to understand what the rules are for gift taxes and estate taxes. If your estate is an estate that is going to potentially be taxed, or if you are making a large gift and you worry about whether or not that gift is going to be taxable, our legal team can help you. You should give us a call as soon as you can when you begin to make plans to transfer any of your possessions, as our legal team can help you to devise a comprehensive tax strategy that works for you.
What is the Gift Tax Lifetime Exclusion in New York?
If you live in or own property in the state of New York and you are planning on making a gift, you do not need to worry about the gift tax lifetime exclusion and you do not need to be concerned about the state of New York charging you any taxes on gifts that you give.
The state of New York used to charge a gift tax when larger gifts were made, but this gift tax was repealed a long time ago. In fact, 1997 Amendments to Estate and Gift Taxes changed the rules and lifetime exclusion rules for gift taxes have not been an issue within New York State since 2000. No taxes have been charged, or will be charged, for gifts given after 2000.
There is one caveat to this basic rule that you do not have to worry about gift taxes. According to the New York State Department of Taxation and Finance, a gift can be included when calculating the value of your estate assets if the gift is not already included in the federal gross estate and if the gift was made in the three years before the date of death. However, even a gift that meets these criteria will not be included as an estate asset if the gift consists of real or tangible property that is not located in New York State; or if the gift was made when you were not a resident of New York; or if the gift was made prior to April 1, 2014.
If your gift does not fall within these exceptions, is not already included in your federal taxable estate, and was made within three years of your death, that gift is counted as part of the estate that you pass on to heirs or beneficiaries after you pass away. This matters, because it is thus considered when calculating the total value of your estate.
New York has gotten rid of gift taxes, but it still does charge estate taxes. These estate taxes have to be paid by the estate if the value of the estate is above the basic exclusion amount (BEA). For deaths that occur after April 1, 2016 but before March 31, 2017, the basic exclusion amount is $4,187,500. For deaths that occur after April 1, 2017 but before December 31, 2018, the basic exclusion amount is $5.25 million.
In addition to understanding New York rules, you should also understand federal rules for gift taxes because it is possible you could be taxed by the federal government for large gifts.
Getting Help from A Long Island Gift and Estate Tax Planning Lawyer
Mark S. Eghrari & Associates PLLC can provide invaluable assistance understanding the gift tax lifetime exclusion rules that could apply to asset transfers you make and can help you to learn everything you need to know about estate and gift taxes.
Preventing your hard-earned assets from being lost due to high tax bills when you give a gift or when you pass away is of vital importance. Let our Long Island tax planning lawyers help you. Download our estate planning checklist to find out more about how the estate planning process works and how the process can help you to reduce taxes. You can also give us a call at (631) 265-0599 or contact us online to get personalized advice and make a comprehensive estate plan that protects your wealth as you pass it on to loved ones. Give us a call today to find out more.