Although the House bill intended to eliminate estate tax entirely in 2024, the final version of the Tax Cuts and Jobs Act trumped it – keeping it in place. However, the estimated 5,000 wealthy families that have been affected by it in the past will now see some reprieve.
For the most part, the law remains unchanged with the exception of new exemption base levels. So what is the upside? Good for tax years 2018 through 2025, the exemption level has nearly doubled from $5 million to $10 million. The exemption is indexed for inflation, allowing individuals to safeguard $11.2 million in assets in 2018 from these taxes. The new limitations should exclude roughly 4,000 taxpayers from getting hit with the tax.
Further helping the situation, was the doubling of the generation-skipping transfer tax exemption to $11.2 million for 2018, and the annual gift tax exclusion rising from $14,000 to $15,000.
The tax rate on taxable gifts or estates in excess of the exclusion still remains at 40 percent.
If have questions on how the estate and gift tax changes may impact your personal situation, contact a Doeren Mayhew tax advisor.
Want to reach the author? Email Joseph DeGennaro or contact him at 248.244.3033.
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