Area 1: Individual Tax Planning (30-40%)
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Taxable Gifts = Total Gifts - Annual Exclusions - Marital Deduction - Charitable Deduction
Annual exclusion is $19,000 per donee (2026). Unlimited marital deduction for US citizen spouses. Gift-splitting available for married couples. Taxable gifts reduce lifetime unified credit.
Estate Tax = (Gross Estate - Deductions) x Tax Rate - Unified Credit - Prior Gift Tax Credits
Gross estate includes all property at FMV (date of death or alternate valuation date). Unified credit shelters ~$14.50M (2026). Top marginal rate is 40%. Portability allows surviving spouse to use deceased spouse's unused exemption.
| Item | Amount | Notes |
|---|---|---|
| Annual gift exclusion | $19,000 per donee | Indexed for inflation; doubles with gift-splitting |
| Lifetime unified credit exemption | ~$14.50 million | H.R. 1 extended elevated exemption through 2029 (was scheduled to sunset after 2025) |
| Top estate/gift tax rate | 40% | Applied to taxable estate/gifts above exemption |
| GST exemption | $13.99 million | Separate from estate tax exemption; also extended by H.R. 1 through 2029 |
| Marital deduction | Unlimited | Spouse must be US citizen; QDOT required for non-citizen spouse |
| Charitable deduction | Unlimited | Available for both gift and estate tax purposes |
| Portability | Deceased spouse's unused exemption (DSUE) | Must file estate tax return (Form 706) to elect; not available for GST exemption |