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Estate, Gift and Generation Skipping Tax Provisions In The New Tax Act

This brief article will deal with the changes to the Estate, Gift and Generation Skipping Tax under the new tax law.

estate planning tax lawThe Act doubles the basic exclusion amount for estates of individuals who die during the 2018 through 2025 tax years and for gifts made during those same tax years.  The basic exclusion amount for each person increases from 5.6 million per person in 2017 to 11.2 million per person in 2018.  The amount of the exclusion will be indexed for inflation starting in tax year 2019.

The Act does not repeal the estate, gift or generation skipping tax for estates which are valued greater than the basic exclusion amount.  Portability which is allowed under the current Act will remain and will continue to allow a surviving spouse to elect to preserve the deceased spouse’s unused exclusion.  Finally, the Act retains the stepped up basis adjustments for all estates.  Under the new Act in the year 2026 the basic exclusion amounts will return to the current levels for 2017.

By – James D. Beatty