Wealth Transfer: Estate Tax and Gift Tax
Chapters in this video
- 0:00 The gift tax game and the $19,000 annual exclusion
- 1:44 Gift splitting, Form 709, and the lifetime exemption bucket
- 3:43 Unlimited marital and charitable deductions
- 4:16 Estate tax, portability, and the DSUE election
- 5:52 Basis battle: carryover versus stepped-up at death
- 7:11 The unified tax system and no clawback rule
- 8:13 Rapid-fire exam recap
What this video covers
- How the $19,000 annual gift exclusion works per recipient, and why a single donor can give $19,000 to unlimited people with zero paperwork
- Why gift splitting doubles the annual exclusion to $38,000 but requires Form 709 even when no tax is owed
- How the $15 million lifetime exemption acts as a unified bucket shared between gift tax and estate tax, and why gifts above the annual exclusion reduce it dollar-for-dollar without triggering immediate tax
- Why the unlimited marital deduction requires the recipient spouse to be a U.S. citizen, regardless of the donor's citizenship
- How portability lets a surviving spouse claim the deceased spouse's unused exemption (DSUE) for up to $30 million combined, and why Form 706 is required even when no estate tax is owed
- Why gifted assets get carryover basis while inherited assets get stepped-up basis to fair market value at death, and what that means for unrealized gains
- Why inherited traditional individual retirement accounts (IRAs) do not receive a step-up in basis and remain taxable as ordinary income upon distribution
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