Tennessee’s Gift Tax Is No More

It seems like taxes are everywhere these days. You get taxed for your income, food, or anything else that you buy. You can even get taxed after you die. Most of these taxes are a way of the government to increase its dwindling revenue. However, there has been a push in Tennessee to remove some of these taxes in an attempt to lure new residents and businesses.

You may have heard about a gift tax. A gift tax is a tax excised on any gifts worth above a certain amount of money. Tennessee was one of only two states that still had a gift tax. However, the Tennessee General Assembly repealed the gift tax last year. Before the tax was repealed, any gift in the amount of $13,000 or under was exempted from the tax if the gift was made to a spouse, sibling, child, or other lineal descendent. The amount exempted to all other people was any gift valued at $3,000 or under. The tax rate ranged from 5.5% to 16% for any gift over the exempted amount.

It is important to note that any gift made before January 1, 2012 may still be subject to the Tennessee gift tax. However, any gift made after January 1, 2012 are free of any gift tax. Although Tennessee has repealed its gift tax, there is still a federal tax on any gifts over $14,000 given in a year. When completing your estate plan, you should recognize what taxes are required and what taxes may be avoided. If you have any questions about your estate plan in Tennessee, contact The Higgins Firm. Our Tennessee estate planning attorneys would be happy to answer any questions regarding your estate plan.