The number isn't yet official—and won't be until later this year when the Internal Revenue Service will announce this and many other inflation adjustments. But it comes from two highly reliable sources.
In a time of political change and laws that may be shifting, the word is out on the annual gift tax exclusion. It has been projected to rise for the first time since 2009.
The Wall Street Journal broke the good news as early as it could, in a Q&A entitled “Expect Gift Limit to Rise Next Year.” First, a caveat: it’s not the present lifetime exclusion of $5.12 million you can expect to see increase, as the jury is still very much out on that one. Rather, it’s the annual gift tax exemption presently set at $13,000.
Currently, you can exclude $13,000 per person per year, before ever reducing your lifetime exemption amount. Good news: that amount is set to adjust to $14,000.
We await official numbers, but they should arrive later in the year. If and when the annual gift exclusion increases, this will bring a welcome bump in your wealth transfer opportunities.
If nothing else, the attention given to this uptick in the annual gift exclusion also may offer a wake-up call to the power of annual giving. Just think of what you can do for each of your loved ones with an annual gift of $14,000.
Reference: The Wall Street Journal (September 29, 2012) “Expect Gift Limit to Rise Next Year”