The newly enacted Tax Cuts & Jobs Act makes significant changes to the Gift and GST taxes. One such change is that the §2503 gift tax exclusion amount will increase to $15,000 after five long years of being at $14,000.
Additionally, the Tax Cuts & Jobs Act increases each taxpayer’s lifetime exemption from $5,490,000 in 2017 to $11,200,000 effective 1/1/2018, an increase of $5,710,000. For married couples, the lifetime exemption increases from $10,980,000 in 2017 to $22,400,000; an increase of $11,420,000. Taxpayers who previously made gifts that exhausted their lifetime exemption before 1/1/2018, now have the opportunity to make additional gifts equal to the increase in their lifetime exemption without exposure to incurring Gift taxes.
However, this increase in lifetime exemption is only applicable to decedents whose deaths occur prior to December 31, 2025. Consequently, on January 1, 2026, the Estate and Gift Tax exemption will revert to $5 million per taxpayer, adjusted for inflation after 2011.
Please contact the Estate Planning Attorneys at Feldstein Grinberg Lang & McKee, P.C. to discuss whether the increased exemption should be used during your lifetime in order to avoid higher Estate taxes at the time of your death.