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A Better Partnership


Oct 2013
October 21, 2013

Inflation-Adjusted 2014 Figures for Estate and Trust Tax Brackets and Other Transfer Tax Items

A number of tax figures are adjusted each year for inflation based on the average Consumer Price Index (CPI) for the 12-month period ending the previous August 31. The August 2013 CPI was released by the U.S. Department of Labor in September. Using the CPI for August 2013, (and the preceding 11 months) the Research Institute of America (RIA) has calculated adjustments for 2013 to the estate and trust income tax rate schedule, and for transfer tax items.

If Taxable Income Is The Tax Is
Not over $2,500 15% of taxable income
Over $2,500 but not over $5,800 $375.00 plus 25% of the excess over $2,500
Over $5,800 but not over $8,900 $1,200.00 plus 28% of the excess over $5,800
Over $8,900 but not over $12,150 $2,068.00 plus 33% of the excess over $8,900
Over $12,150 $3,140.50 plus 39.6% of the excess over $12,150


Unified Estate and Gift Tax Exclusion Amount

For gifts made and estates of decedents dying in 2014, the exclusion amount will be $5,340,000 (up from $5,250,000 for gifts made and estates of decedents dying in 2013).

Generation-Skipping Transfer (GST) Tax Exemption

The exemption from GST tax will be $5,340,000 for transfers in 2014 (up from $5,250,000 for transfers in 2013).

Gift Tax Annual Exclusion

For gifts made in 2014, the gift tax annual exclusion will be $14,000 (same as for gifts made in 2013).

Special Use Valuation Reduction Limit

For estates of decedents dying in 2014, the limit on the decrease in value that can result from the use of special valuation will be $1,090,000 (up from $1,070,000 for 2013).

Determining 2% Portion for Interest on Deferred Estate Tax

In determining the part of the estate tax that is deferred on a farm or closely-held business that is subject to interest at a rate of 2% a year, for decedents dying in 2014, the tentative tax will be computed on $1,450,000 (up from $1,430,000 for 2013) plus the applicable exclusion amount.

Increased Annual Exclusion For Gifts to Noncitizen Spouses

For gifts made in 2014, the annual exclusion for gifts to noncitizen spouses will be $145,000 (up from $143,000 for 2013).

Reporting Foreign Gifts

If the value of the aggregate “foreign gifts” received by a U.S. person (other than an exempt Code Sec. 501(c) organization) exceeds a threshold amount, the U.S. person must report each “foreign gift” to IRS. ( Code Sec. 6039F(a) ) Different reporting thresholds apply for gifts received from (a) nonresident alien individuals or foreign estates, and (b) foreign partnerships or foreign corporations. For gifts from a nonresident alien individual or foreign estate, reporting is required only if the aggregate amount of gifts from that person exceeds $100,000 during the tax year. For gifts from foreign corporations and foreign partnerships, the reporting threshold amount will be $15,358 in 2014 (up from $15,102 for 2013).

Kiddie Tax

The exemption from the kiddie tax for 2014 will be $2,000 (same as for 2013). A parent will be able to elect to include a child’s income on the parent’s return for 2014 if the child’s income is more than $1,000 and less than $10,000 (same as for 2013).

AMT Exemption for Child Subject to Kiddie Tax

The AMT exemption for 2014 for a child subject to the kiddie tax will be the lesser of (1) $7,250 (up from $7,150 for 2013) plus the child’s earned income, or (2) $52,800 (up from $51,900 for 2013).

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