Intergenerational Transfers Under an Uncertain Estate Tax

21 Pages Posted: 30 Aug 2014 Last revised: 1 Sep 2014

See all articles by David Joulfaian

David Joulfaian

U.S. Department of the Treasury, Office of Tax Analysis (OTA); Georgetown University - Department of Economics

Date Written: August 22, 2014

Abstract

The paper examines the pattern of lifetime transfers during a period of uncertainty in estate taxation where the tax was set to expire, reintroduced, and its reach curtailed. More specifically, it examines lifetime gifts made during the past decade, with a focus on the size and frequency of transfers over the period 2002-2012. Using data from gift tax returns, reported lifetime taxable gifts over the years 2002-2009 were in the range of $20 to $30 billion per year. But, by 2012, these taxable gifts (which are in excess of the annual exclusion) increased to an unprecedented level of $440 billion. These transfers represent significant acceleration in bequests, and may very well have serious implications for future tax revenues, as well as the observed distribution of income and wealth. Equally important, the findings also provide further support for the bequest motive as these lifetime transfers cannot be accidental in nature.

Keywords: lifetime gifts, estate tax, gift tax

JEL Classification: G11, H24

Suggested Citation

Joulfaian, David, Intergenerational Transfers Under an Uncertain Estate Tax (August 22, 2014). Available at SSRN: https://ssrn.com/abstract=2489245 or http://dx.doi.org/10.2139/ssrn.2489245

David Joulfaian (Contact Author)

U.S. Department of the Treasury, Office of Tax Analysis (OTA) ( email )

1500 Pennsylvania Ave. NW
Washington, DC 20220
United States

Georgetown University - Department of Economics ( email )

37th St NW & O St NW
Washington, DC 20007
United States

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