Florida Estate and Gift Tax
Forever a favorite retirement destination of retirees throughout the United States, Florida is known for being a tax-friendly state. It is one of only seven states that do not collect state income taxes, and its property and sales taxes are close to the national average. Even so, it is imperative that an individual desiring to take the most advantageous approach in utilizing our state’s tax laws and regulations seek the advice and skill of a knowledgeable tax attorney. TEPS LAW, LLC Founder & CEO Melissa Wheaton is an attorney that holds an advanced degree in taxation and is specially equipped to deal with considerations such as gift and estate taxation.
Estate Tax in Florida
An estate tax is also known as a “death tax” because it is a tax levied on the estate of someone that passes away. In Florida, there is no state estate tax no matter the size of the estate. However, there may be federal taxes that must be paid and that is determined based on the value of the gross estate. As the amount an individual may leave to their heirs without having to pay federal estate taxes is currently $11.58 million, the majority of estates pay no federal estate taxes.
What is included in a gross estate?
A gross estate includes the following assets:
- Real property
- Property held jointly
- Life Insurance (with Incidents of Ownership)
- Annuities
- Trust assets
- Accounts that designate a beneficiary
- Assets held in the name of the decedent
- Retirement accounts (ie., IRA)
- Cash
- Securities
- Business interests
Gift Tax Treatment in Florida
The Internal Revenue Service (IRS) defines a “gift” as any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money’s worth) is not received in return. While Florida does not have a state gift tax, the federal government does. Luckily, there is an annual gift tax exclusion or the amount you can transfer per year without Uncle Sam expecting to get a piece of the pie. Currently, that amount is $15,000.00. Any exchange that exceeds $15,000.00 in value must be reported to the IRS.
Are there ways to avoid the federal gift tax?
There are some exclusions to the federal gift tax. There is no tax on gifts made between spouses regardless of the amount. Also, in most cases, donations to charities do not trigger the federal gift tax. There are potentially other ways to successfully avoid the federal gift tax on transfers over $15,000.00. To find out if any of them apply to your situation, contact the team at TEPS LAW.
Contact An Attorney Experienced in Florida Estate and Gift Tax Laws
Contact TEPS LAW, LLC today to speak with a Florida lawyer that has the experience and skill to address all your estate planning needs, including estate and gift taxes. You can contact us online or by calling (888) 401-6020 to schedule an estate planning discovery session. We offer virtual and telephonic consultations by appointment.