North Carolina to Reform Gift Tax?
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On February 15, 2007, bill H235 was introduced in the North Carolina General Assembly to reform the North Carolina gift tax so that it would be based on the federal gift tax. Under the proposed legislation, NC gift tax would only be due if federal gift tax is due. The change would be effective January 1, 2007. Click “Continue Reading” to see the text of the bill.
Under current law, North Carolina allows the same $12,000 annual exclusions as the federal system, but rather than a $1 million lifetime exemption, there is only a $100,000 lifetime exemption, which applies only to ancestors and descendants.
The NC gift tax catches many residents (and even professional advisors) unaware, and many gifts are never reported, mainly because of ignorance of law, so the reform is probably a good idea. I’m not sure how much tax revenue would be lost.
