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2014 unified estate/gift tax exemption increases

12-1-2013 - Effective January 1, 2014, the unified lifetime gift tax and estate tax exemption will increase by $90,000, from $5.25 million to $5.34 million. This is the amount that an individual may give away, free of gift and estate tax. A married couple can pass twice that amount, or $10.68 million. A surviving spouse may use any portion of the deceased spouse's unused lifetime exemption, provided that portability has been elected on the decedent's final tax filing.

The annual gift tax exclusion remains steady at $14,000. That means that an individual may give, free of gift tax and without impacting his/her lifetime exemption, up to $14,000 per year to as many individuals as he/she wishes. A married couple may double the amount. Thus, a married couple could give each of their three children $28,000 per year without any gift or estate tax ramifications.

Certain gifts may exceed $14,000 per year and still incur no gift tax. For example, a check written for a child's college tuition when the check goes directly to the educational institution.

Learn more about estate and gift taxes here.

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