Update of Minnesota Gift and Estate Tax Provisions


 

The Minnesota estate tax rate and exemptions are in the midst of a phase-in of new rates and exemption amounts passed by the legislature in 2014:

Year

MN Estate Tax Exemption

MN Estate Tax Rate

2014

$1,200,000.00

9-16%

2015

$1,400,000.00

10-16%

2016

$1,600,000.00

10-16%

2017

$1,800,000.00

10-16%

2018 and thereafter

$2,000,000.00

10-16%

Minnesota retroactively repealed its briefly enacted gift tax in 2014; however, the State continues to apply a look back period to include gifts made by a decedent within three years of his date of death in his estate for estate tax purposes. However, a bill has been introduced to delay the application of the three year look-back period to decedents dying after June 30, 2016. Otherwise, currently the State of Minnesota does not tax gifts made by an individual during his life.

Currently, the federal estate and gift unified credit amount is $5.45 million and the annual gift exclusion amount is $14,000.00. The top federal estate tax rate is 40%.

To maximize the amount you can transfer free of state or federal gift and estate taxes, you should contact an attorney who specializes in estate and tax planning.

 

The information on this site is not intended to provide specific legal advice nor does it create an attorney-client relationship.  An attorney-client relationship may only be created through an explicit agreement with our firm.

IRS CIRCULAR 230 DISCLOSURE: To comply with requirements imposed by the Department of the Treasury, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written by the practitioner to be used, and that it cannot be used by any taxpayer, for the purpose of (i) avoiding penalties that may be imposed on the taxpayer, and (ii) supporting the promotion or marketing of any transactions or matters addressed herein.

Our use of a disclaimer does not change the high degree of care and attention that we devote to our tax advice. Moreover, the inclusion of the disclaimer does not indicate that penalties could be imposed on the transaction at issue, but rather merely indicates that the advice we have provided you in such communication does not preclude the IRS from asserting penalties. Finally, please be assured that the use of such a disclaimer to avoid unnecessary legal expenses is similar to the approach adopted by most other tax practitioners.

     
     
     

 

 


Disclaimer: The information on this site is not intended to provide specific legal advice nor does it create an attorney-client relationship. An attorney-client relationship may only be created by an explicit agreement with our firm.