Wednesday, October 26, 2005
Beginning in 1999, the amount of the annual exclusion has been indexed for inflation. I.R.C. § 2503(b)(2). However, the amount of the exclusion is rounded to the closest multiple of $1,000 which is below the indexed amount.
The annual exclusion began at $10,000 and was increased to its present level of $11,000 in 2002.
According to unofficial reports such as CCH Projects Key Tax Figures for 2006, the annual exclusion will increase to $12,000 starting with calendar year 2006.