How Gift Taxation Works in Nebraska

Photo of author

Paul Sundin, CPA

Do you have an estate plan?

We'll show you our favorite strategies

Nebraska is a state with pretty peculiar taxation. While it does not have a local gift tax, and the estate tax had technically also been canceled in Nebraska several years ago, there is a special inheritance tax, which may want Nebraska residents and those who happen to have a property in the state to take their estate planning very seriously.

This article shall discuss how gift tax works in Nebraska today and why it is such an essential part of estate planning.

Gift tax in Nebraska

While Nebraska, like many other states, does not have a gift tax, its residents can still become responsible for a federal gift tax due.

Considering the federal gift tax exemption principle, a taxable gift is a transaction worth more than $15,000. It can be an actual cash transfer, an investment, an interest-free loan, or a piece of property.

Taxes written on hanging tags

The good news is that a Nebraska resident can make this kind of gift to as many people as they want without filing Form 709: U.S. Gift Tax Return. Moreover, once you are married, you can join your effort with a spouse and make $30,000 without any fiscal consequences.

In other words, once you are a married couple with two children, you can easily give away $60,000 worth of your estate to heirs, reducing its taxable part.

This principle is crucial for Nebraska residents due to the state`s specific inheritance legislation.

Gift tax and Estate tax in Nebraska

While Nebraska technically has no estate tax, it is one of 7 states that impose a pretty specific inheritance tax on its residents and those who die while having an estate in Nebraska, even if they are not residents of the state at the moment.

In other words, whether you live in Nebraska or not, your heirs will be responsible for the inheritance tax due within a year after your death if you have a property in the state.

The tax has exemption within $10,000 and $40,000 and rates from 18% to 1%, depending on the relationship between decent and heirs.

Therefore, Nebraska residents benefit most from the gift tax legislation, which allows them to reduce the taxable part of the estate and fit it into the exemption frame.


While the gift tax is usually not a big concern for most taxpayers as it applies to sufficient properties only.

But when we talk about Nebraska, it becomes crucial due to the state`s peculiar inheritance tax and its pretty modest exempt amount.

Due to the absence of state gift tax in Nebraska, gifting away your property throughout several years is the best opportunity to reduce the taxable estate and fit its value within the exempt amount. 

Leave a Comment

We know that estate planning can be complex. That's why we are there every step of the way.


Estate CPA

Gilbert, AZ