The Tax Cuts and Jobs Act passed in December 2017 included changes to all areas of the tax code, including estate and gift tax.
The estate and gift tax exemption amount for 2018 through 2025 was increased to $10 million, which is indexed for inflation up to $11.2 million. This means that for 2018, the estate tax exemption amount is $11.2 million. For a married couple the amount can be doubled through the use of portability to $22.4 million. The exemption amount will revert back to $5 million in 2026, unless Congress acts to change the law before then.
The Tax Cuts and Jobs Act did not change the stepped-up basis in property transferred through an estate. This means that property transferred at death still receives a stepped-up basis to the fair market value at death, meaning that if the property is subsequently sold at fair market value, no capital gains tax would be due on sale. Additionally, the new tax law did not change the gift tax annual exclusion, which allows an individual to gift up to $15,000 per person in 2018.
If you need help with estate or tax planning, the experienced attorneys at Murphy, Taylor, Siemens & Elliott are ready to help you. Please call us at (816) 364-6677.
Authored by: Lindsey Holcumbrink