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New York state has not had a gift tax since it was repealed in 2000. However, even absent a gift tax, New York historically required decedents to include in their New York taxable estate all gifts made within three years of death if made between April 1, 2014 and January 1, 2019 while the decedent was a New York resident.
As a result of a recent statutory amendment, this add-back no longer applies to decedents with dates of death on or after January 1, 2019. And, while subtle, the differences in the drafting of the new rule compared to the old rule results in more favorable treatment for those who did make gifts. Specifically, regardless of the date, a gift was made (i.e. even if between April 1, 2014 and January 1, 2019), decedents dying on or after January 1, 2019 will not add-back into the decedent’s estate any gifts as long as they die after January 1, 2019.
So what? Well, for New York estate tax purposes, after January 1, 2019 a person can choose to gift away all of their assets and it will not be added-back to their gross estate. In light of the larger federal estate tax exemption of $11,400,000, most New York State residents can effectively reduce or eliminate their New York State estate tax without having any federal estate or gift tax consequences.
Keep in mind that the estate tax landscape is ever-changing, and therefore we encourage our clients to speak with an experienced tax attorney or tax professional regarding the best way to utilize the current federal and New York State estate tax exemptions.
Russo Law Group, P.C.
100 Quentin Roosevelt Blvd., Suite 102
Garden City, NY 11530