Recently, the IRS ruled that same-sex married couples can file federal joint returns, even if their state does not recognize their marriage. In addition, gay couples can now avoid or delay paying federal estate taxes because couples can transfer property to each other without incurring federal tax consequences.
Married couples can pass an unlimited amount of property to their spouse without incurring federal estate taxes on the first death because of the marital deduction. Previously, the IRS did not allow gay couples to utilize this deduction. Now, however, same-sex couples can give an unlimited amount of money and property to his or her spouse without incurring tax on the first death. In addition, their federal tax exemption amount is doubled to 10.5 million. For wealthier clients, this can mean savings of millions of dollars on the second spouse's death.
Same-sex couples should see an attorney to either implement a plan or review their current plan to ensure that they are taking full advantage of the new laws. Mary G. Finlay of Finlay Law Group, APC has a masters of laws in taxation so she is uniquely qualified to assist couples so that they maximize the amount of property going to couple's loved ones rather than to the IRS.