The estate and gift tax exemptions skyrocketed in 2017, as the result of changes to the tax law. The increases mean that in 2019, individuals may pass on $11.4 million from their combined estate at death and the gifts they gave before they passed. These estate tax exemptions will expire, unless laws change. However, the IRS announced regulations that said individuals who make large gifts while the exemption is higher and die after it goes back down, won’t see the estate tax benefit eroded.
“As a result, individuals planning to make large gifts between 2018 and 2025 can do so, without concern that they will lose the tax benefit of the higher exclusion level once it decreases after 2025,” the agency said in a press release.
Yahoo Finance’s recent article, “IRS Says Millionaires Can Keep Estate Tax Benefits After 2025,” says that the exemption increase was a big priority for Republicans in the 2017 tax overhaul.
This exemption decreased the number of individuals who’d be subject to the 40% estate tax by about two-thirds.
The exemption was $5.5 million prior to the law change.
If the law is reversed with a new administration and a more balanced tax plan, changes could sweep the House, Senate and White House after the 2020 national elections.
Many current presidential candidates propose to decrease the estate tax exemption so a greater number of wealthy families will be liable for a greater estate tax
The current rules and the potential for tax savings make estate and tax planning important and advantageous. Our frim invites you to come in and start now!
Reference: Yahoo Finance (November 22, 2019) “IRS Says Millionaires Can Keep Estate Tax Benefits After 2025”