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Tax Cuts and Jobs Act Resource Center: Estates, Gifts and Trusts

  • Mar 14, 2018
  • Marc S. Maser Christine A. Reuther
  • By Marc S. Maser  and Christine A. Reuther

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Federal Estate and Gift Tax Retained with Increased Exemption Amounts

Under the Internal Revenue Code, a federal gift tax is imposed on certain lifetime transfers, and an estate tax is imposed on certain transfers at death. Under pre-Act law, the first $5 million (as adjusted for inflation in years after 2011) of transferred property was exempt from estate and gift tax. For estates of decedents dying and gifts made in 2018, this “basic exclusion amount” or exemption was scheduled to be $5.6 million (or $11.2 million for a married couple).

Under the new law, for estates of decedents dying and gifts made after December 31, 2017 and before January 1, 2026, the base estate and gift tax exemption amount is doubled from $5 million to $10 million. The $10 million amount is indexed for inflation occurring after 2011, and is expected to be approximately $11.2 million in 2018 (or $22.4 per married couple). The increase in the exemption expires for decedents dying and gifts made after December 31, 2025. 

It is important to note that the language in the Act does not mention generation-skipping transfers. Because the generation-skipping transfer tax exemption amount is based on the gift and estate tax exemption amounts, generation-skipping transfers will also see an increased exemption amount.

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DISCLAIMER: Although McCausland Keen + Buckman always strives to provide accurate and current information, the foregoing is intended for general informational purposes only, shall not be construed as legal advice, and does not create or constitute an attorney-client relationship.

Marc S. Maser

about the author

Marc S. Maser

Marc helps clients buy and sell companies, and structure and finance tax-efficient domestic and foreign business transactions.

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Christine A. Reuther

about the author

Christine A. Reuther

Christine helps clients structure new business ventures, acquisitions and divestitures and provides ongoing contracting and tax advice.

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