On November 10, 2021, the IRS released tax inflation adjustments for 2022. Notably, the federal estate and gift tax exemption amount will increase from $11.7 million to $12.06 million beginning January 1, 2022.
In addition, beginning on January 1, 2022, the amount of the federal gift tax annual exclusion (the amount a person can give to a recipient other than a spouse or charity without using up any of his or her federal gift tax exemption) will increase from $15,000 to $16,000 per recipient. There remains an unlimited federal gift tax deduction for gifts to US citizen spouses and tax-exempt organizations.
Our Trusts and Estates Team will continue to closely monitor potential legislation in the areas of federal gift and estate tax so we can effectively advise our clients with respect to their estate planning needs.