James F. McDonough
Of Counsel
732-568-8360 jmcdonough@sh-law.comFirm Insights
New York Estate Tax Law Change Could Hurt Home Gifting
Author: James F. McDonough
Date: March 7, 2014
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New York Gov. Andrew Cuomo and lawmakers are currently considering changes to the Empire State’s estate tax law. If passed, one of the biggest benefits would be an increase to the estate tax exemption from $1 million to $5.25 million by 2019, which means New Yorkers could pass on assets to children worth $5.25 million without paying taxes.
However, there is expected to be some downsides to the new law as well. For example, it could be more difficult for people to gift houses. According to Newsday, all taxable gifts, including houses, would be counted as part of a person’s estate for tax purposes after they die. Additionally, if the property s sold for more than what the owner originally paid, there would be a capital gains tax of around 30 percent on top of the estate tax.
With this in mind, it is recommended that New Yorkers gift homes before the law is implemented if passed, which would be as early as April 1. Experts say that wealthy homeowners should do their research before making any moves though.
Despite the fact that homeowner’s may have additional hurdles when gifting a property, the estate tax law changes are supported by many. Wall Street millionaires, middle class families and small business owners all support the law. The current estate tax doesn’t only impact the super rich, which is why the exemption increase from $1 million to $5.25 million would be a major achievement for all New Yorkers.
The state will benefit from this move as well, with Cuomo stating that the goal is to keep New York retirees at home instead of flocking to states such as Florida.
- Practices: Tax and Trusts & Estates, Estate & Trust Litigation, Real Property Tax Strategies
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
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