Annual Gift Tax Exclusion Increases

In Rev. Proc. 2001-59, released in December 2001, the Internal Revenue Service announced certain changes in the Annual Exclusion for Gifts and the Generation Skipping Transfer Tax Exemption as listed below: Annual Exclusion for Gifts: (1) For calendar year 2002, the first $11,000 of gifts to any person (other than gifts of future interests in property) are not included in the total amount of taxable gifts under §2503 made during that year. (2) For calendar year 2002, the first $110,000 of gifts to a spouse who is not a citizen of the United States (other than gifts of future interests in property) are not included in the total amount of taxable gifts under §§2503 and 2523(i)(2) made during that year. Generation-Skipping Transfer Tax Exemption: For calendar year 2002, the generation-skipping transfer tax exemption under §2631, which is allowed in determining the "inclusion ratio" defined in §2642, is $1,100,000.