Annual Estate and Gift Tax Exclusions in 2009

Every year the Internal Revenue Service publishes new rates and tables for a variety of tax exemptions. Here are the 2009 annual estate and gift tax exclusions, effective as of January 1, 2009.

1)  The Annual Gift Tax Exclusion is $13,000 in 2009. As a result of  the 2009 annual gift tax exclusion, any person can give any other person up to $13,000 before the gift is subject to federal gift taxes. Also, in 2009 a couple may together make a combined $26,000 gift for tax purposes before there is a gift tax. The lifetime gift tax exclusion remains at $1,000,000.

2)  The Annual Gift Tax Exclusion for Gifts to Non-Citizen Spouses is $133,000. This is the maximum amount a person may transfer to a non-citizen spouse before the gift is subject to a gift tax. This usually applies when a gift is made by a citizen spouse to a permanent resident alien spouse.

3)  The Federal Estate Tax Exemption is $3,500,000 in 2009. Thus, under the current federal estate tax law, a person may leave up to $3,500,000 to anyone free of estate taxes, and may leave an unlimited amount to a surviving spouse (as long as he or she is a citizen). In 2010, there will be an unlimited “exemption amount”, meaning that any amount left to heirs, no matter how large, passes free of federal estate tax. In 2011, the “exemption amount” returns, but is substantially reduced, to $1,000,000, under current law.

Source: IRS Rev.Proc. 2008-66, 2008-45 IRB1
I.R.C. Section 2010