The IRS has released the 2014 tax exclusions, exemptions, and other information. Of interest to this audience:
- The unified credit (estate and gift tax, or basic exclusion) is $5.34 million in 2014. Portability remains and the spouses can transfer up to $10.68 million tax free.
- For an estate of a decedent dying in 2014, if special use valuation under section 2032A is used, the aggregate decrease in the value of the qualified property resulting from the use of section 2032A cannot exceed $1.09 million.
- The annual gift tax exclusion remains $14,000 in 2014.
- The loan limit for agricultural bonds for first-time farmers (“aggie bonds”) is $509,600.
Also included in the IRS notification are the 2014 tax brackets. You may find this information useful as you begin tax planning for 2014. (The information is on pages 5 – 7 of the notification.)
What does it all mean? It means that there were no substantive changes to estate and gift tax in 2014 (as of this writing) and aggie bonds are available to first-time farmers. Later this week we’ll go into further detail about estate and gift tax issues but for now, know that an individual will not pay federal estate taxes for a taxable estate under $5.34 million (or, if married, under $10.68 million).
In the meantime, should you have any questions, you are welcome to contact us!
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