The sweeping tax reform legislation that just passed is making waves throughout the county. Of particular interest to our practice is the future of gift, estate and generation-skipping transfer (GST) taxes under this legislation.
Under current law, the combined federal gift and estate tax exemption, and the GST tax exemption is $5.49 million. The top tax rate for all three taxes is 40%. The annual gift tax exclusion is $14,000. That means you can reduce your taxable estate by making tax-free gifts of up to $14,000 per year to an unlimited number of people without utilizing any of your lifetime gift and estate tax exemption.
The Tax Cuts and Jobs Act increases these exemptions to $11.2 million per individual and $22.4 million for a married couple, and it repeals the estate tax after 2024. The Generation skipping tax is also doubled and terminated in 2024. Under this bill, the annual gift tax exclusion is retained, though it is also aged for inflation and will be $15,000 per donee for 2018. After 2024 the gift tax is retained but the rate falls to 35%.
For questions regarding this new bill or any other estate planning issue, please contact us at 404-255-7400 or email us at firstname.lastname@example.org.