Gift Tax Annual Exclusion Amount Unchanged In 2010

The gift tax annual exclusion is the maximum amount which a taxpayer can gift each year to any beneficiary without being required to use his or her $1 million lifetime gift exemption amount. If gifts are limited each year to the annual exclusion amount established in the year of the gift, the person making the gift is not required to file a gift tax return, and no gift taxes will be due. Since 1997, when the gift tax exclusion was $10,000, the gift tax annual exclusion amount has been adjusted annually based on cost of living increases in the Consumer Price Index. Over the years, the annual exclusion has increased from $10,000 to $13,000. As you may know, the gift tax annual exclusion amount in 2009 is $13,000. The IRS recently announced that the gift tax annual exclusion amount available to taxpayers in 2010 will remain unchanged at $13,000.

Thanks to the Tax, Trusts and Estates Law Monitor for bringing this issue to my attention.