Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

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2006 Gifting Limit

Posted by taxguru on October 15, 2005

Q:

Subject: Annual Gift Exclusion

Hello Kerry –
 
I read on your website that the annual gift exclusion will increase to $12,000 in 2006, but I was unable to verify that elsewhere.  Would you mind sharing your source for that information?  We want to make sure the information is solid before using it in our planning models.
 
Thanks very much –

 A:

That came from the same source as the 2006 Federal income tax rates that I posted on my site, CCH.

Gift Tax Annual Exemption

The gift tax annual exemption, which increased by $1,000, to $11,000 in 2002 for the first time since it was indexed for inflation in 1997, will increase to $12,000 for 2006. Pursuant to the IRC, the exemption can rise only when the inflation adjustment would produce an increase of $1,000 or more.

Kerry Kerstetter

 

Follow-Up:

Kerry –

Thank you for the fast response.  It looks like this is still a CCH projection, but I’m guessing that’s fairly reliable.

Thanks again –

 

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