“Gov. Cuomo has proposed a change to New York’s estate and gift tax law that will require all taxable gifts made by a New York resident after March 31, 2014, to be included as part of the gross estate for purposes of calculating the New York estate tax.”
• “Currently, there is no gift tax in New York, and although the amount of lifetime taxable gifts made by a New Yorker may cause the estate tax rate to increase, there is no additional estate tax paid on those gifts.
• New York individuals who have significant estates should consider making taxable gifts before April 1, 2014 – especially if the individual has not used up the federal exclusion amount.”
“New York State repealed its gift tax in 2000. This encouraged New Yorkers to make sizable gifts which in turn reduced taxable estates subject to estate tax starting with a $1M estate. Further, in the time since the New York State gift tax repeal, the Federal gift tax exemption has risen to $5.34M, which has encouraged substantial lifetime gifting which further reduce New Yorkers’ estates, with a corresponding loss of estate tax revenue. The Commission has proposed two options to address the impact of the Federal change on New York estate tax revenues. The first, which is preferred, is to reinstate New York State gift tax, which would subject gifts above a certain threshold to tax rates in line with the New York estate tax. Alternately, New York could require estates to add back the value of any gifts above a certain threshold before determining an estate’s value.”
Above courtesy of Shah & Associates
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