REG — Quick Sheet
Trusts, Estates & Gift Tax Basics
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One-minute revision
- Annual exclusion applies only to gifts of a present interest; gift splitting doubles it
- Unlimited: spouse (US citizen), charity, direct tuition and medical payments
- OBBBA: $15M estate/gift exemption per person ($30M couple) from 2026 — permanent, indexed from 2027
- DNI caps the entity's distribution deduction and the beneficiary's taxable amount, and carries character through
- Simple trust: distributes all income, no charity, no principal. Complex: may accumulate, give to charity, distribute principal
- Trusts hit top rates at very low income → distribute to lower-bracket beneficiaries