House Republicans today outlined a tax reform structure that they are attempting to get passed prior to year-end, which has important estate tax implications for our clients.
The lifetime estate tax exemption currently stands at $5.49 million per individual and $10.98 million per married couple. This amount was recently announced by the IRS to be increasing to $5.6 million per individual and $11.2 million per married couple in 2018.
The proposed tax reform structure would immediately double the lifetime estate tax exemption, and repeal the estate tax altogether starting in 2024. Even after repeal, a decedent's heirs would continue to receive a "step-up in basis" for assets, such that upon the sale of an asset after the decedent's death, the heirs would only owe capital gains tax on the difference between the sales price of an asset that they inherit and the value of the asset at the decedent's death. Previous versions of the proposed estate tax repeal had limited that benefit.
Lara M. Sass, PLLC will continue to keep you updated on any changes. Please feel free to reach Lara M. Sass by phone at 917-628-8007 or by email at firstname.lastname@example.org with any estate planning needs that you wish to address in the meantime.