Reminders – 2022 adjustments to transfer tax exemptions and interest rate


The following federal tax information for 2022 may be helpful as you consider your estate planning options for the rest of the year. You should contact your Loeb estate planning attorney for advice before taking any transfer tax planning steps.

Exclusions and exemptions from transfer duties 2022

  • Annual gift tax exclusion – $16,000 (increased from $15,000)
  • Gift/estate tax exemption – $12.06 million (was $11.7 million)
  • Generation Skip Transfer (GST) Tax Exemption – $12.06 million (was $11.7 million)

Annual exemption from gift tax. The annual exclusion is the maximum you can give to or benefit one person in a calendar year without reducing your lifetime tax exemption, paying gift tax, or filing a federal gift return. Married couples can effectively double the annual debarment amount (up to $32,000 per beneficiary) by choosing on a gift statement to “split” gifts.

Gift/Estate and GST Tax Exemption. Donations in excess of the annual exclusion reduce the donor’s lifetime tax exemption and must be reported on a federal donation return. The gift tax exemption used during lifetime reduces the federal estate tax exemption available at death to offset federal estate taxes. A GST tax may also apply to gifts or bequests to “eliminating persons” (individuals more than one generation below the grantor (e.g., grandchildren) or trusts where all current beneficiaries are persons playoffs). Applying the GST exemption can shield these transfers from GST.

Unless tax laws change, lifetime gift/estate and GST tax exemptions are projected to decrease in 2026 to $5 million (estimated at $6.2 million after adjusting for inflation). 7520 Rates and AFR. Some estate planning techniques, such as settlor-retained annuity trusts (GRATs), variable annuity trusts (CLATs), and intra-family loans and installment sales, are more attractive when certain interest rates are fixed. by the federal government are low, especially the §7520 rate for GRAT and CLAT and the applicable federal rate (AFR) for intra-family loans and installment sales. These rates have increased in recent months (see rates for May and June 2022 below).


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