December 18, 2017 | News
After months of uncertainty, the Senate and House of Representatives agreed on tax reform legislation that includes keeping the estate and gift tax, but with an increased exemption amount. Under the Conference Committee’s proposed legislation, the lifetime exemption for estate and gift tax will increase to $11.2 million per person effective January 1, 2018. The exemption amount will adjust annually for inflation and will decrease to current levels ($5.49 million adjusted for inflation) on January 1, 2026. The Conference Committee’s bill retains the step-up in basis for appreciated assets held at death. The proposed legislation will retain the generation-skipping transfer tax (“GST tax”), but will double the lifetime exemption from the GST tax to $11.2 million per person. As with estate and gift tax, the increased exemption for GST tax will also sunset on January 1, 2026 and will adjust with inflation. Now that we have certainty regarding the transfer tax laws until 2026, taxpayers can still take advantage of tax planning before the end of 2017 and can look forward to new opportunities beginning in 2018.