Proposed regulations issued by the IRS on November 23rd of
this year cleared up one of the main concerns to gift givers after the Trump
Tax cuts of 2017. The doubled estate tax and gift tax exemption will face
no claw-back when these rules expire at the end of 2025. This proposed
regulation eliminates some of the unease that individuals may felt at the
possibility of later having to pay taxes on past giving. This is of
significant importance due to the huge jump in the estate tax exemption for $5.49
Million in 2017 to $11.18 in 2018, which could have created massive back
payments.
This ruling also applies to the generation skipping transfer
exemption as well as the estate tax exemption. While estate planning
attorneys may have had language advising of the possibility of a claw-back,
this regulation eliminates any doubt that gifting your full current exemption
will cause a headache in 2026. If you are interested in learning more
about the new proposed regulations, please feel free to reach out to the
experienced attorneys of Morris Law Group.
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