Several tax figures are adjusted annually for inflation based on the average Consumer Price Index (CPI) for the 12-month period ending the previous August 31st. The August 2013 CPI has now been released by the U.S. Department of Labor. Using the CPI for August 2013, and the preceding 11 months, some of the anticipated 2014 adjustments can be summarized as follows:
- Estate/Gift/Generation-Skipping Tax Exemptions. For gifts or transfers made in 2014, and for those dying in 2014, the exclusion amount will be $5,340,000 (up from the $5,250,000 exclusion in 2013).
- Gift Tax Annual Exclusion. For gifts made in 2014, the gift tax annual exclusion will be $14,000 (the same as for gifts made in 2013).
- Estate & Trust Income Tax Rates. For 2014, the income tax brackets for income taxable at the estate or trust level will be:
a. $2,500 or under
b. Between $2,500 and $5,800
c. Between $5,800 and $8.900
d. Between $8,900 and $12,150
e. Over $12,150
15% of taxable income
$375 plus 25% of the excess over $2,500
$1,200 plus 28% of the excess over $5,800
$2,068 plus 33% of the excess over $8,900
$3,140.50 plus 39.6% of the excess over $12,150