Unlike federal law, New York State does not have a gift tax. However, up until December 31, 2018, New York State required decedents to include all gifts made within three years of death in their New York State taxable estates. As a result of a recent legislative change, this add-back rule no longer applies to decedents with dates of death after January 1, 2019.
The result is that a New York State resident may choose to gift away all of their assets during their life, and these assets will not be added back to their gross estate. Unfortunately, one must remember that New York State law and federal law differ. The current federal estate tax exemption is $11,490,000 and there is a gift tax exemption for the same amount. Therefore, even though one may eliminate New York State estate tax, one may still have to pay the federal estate or gift tax.
Do remember that these estate tax rules are in constant flux. The current Democratic Presidential candidates have an assortment of various estate tax proposals, starting from lowering the threshold down to $1MM to imposing a new “wealth tax” on all assets annually.
Please contact Sverdlov Law PLLC at 212-709-8112 or firstname.lastname@example.org if you need assistance with estate tax planning.