Preservation | Family Wealth Protection & Planning

Wolters Kluwer and Bloomberg Tax have released projected 2023 figures for the gift tax annual exclusion amount as well as the estate and gift tax lifetime exemption amount. These figures were determined using formulas contained in the Internal Revenue Code. They are based on the increase in the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) for the 12-month period that ended August 31, 2022.

It’s that time of year again!  The start of 2022 has brought us an increase in exemption amounts for estate, gift, and generation-skipping transfer (GST) taxes. Each year, the Internal Revenue Service adjusts tax rates to provide for annual cost-of-living increases.

Wolters Kluwer has released projected 2022 figures for the gift tax annual exclusion amount as well as the estate and gift tax lifetime exemption amount. These figures were determined by Wolters Kluwer using formulas contained in the Internal Revenue Code. They are based on the increase in the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) for the 12-month period that ended August 31, 2021.

On September 28, 2021, the House Budget Committee released a report that provides explanations with respect to certain provisions included in the proposed House bill called the Build Back Better Act (the “Report”).

On Monday, September 13, 2021, the House Ways and Means Committee released the text for proposed tax changes to be incorporated in a budget reconciliation bill called the Build Back Better Act (the “Act”). The 881-page text includes several significant changes to income and transfer taxes that could drastically change estate, gift and individual income tax planning if made into law.

Now that the new year has arrived, it is a good time to catch up on the latest tax rates for estate and trust income tax brackets and exemption amounts for estate, gift and generation-skipping transfer (GST) taxes in 2021. The Internal Revenue Service adjusts these figures annually for cost-of-living increases.

The Internal Revenue Service recently published its annual inflation-adjusted figures for 2020 for estate and trust income tax brackets, as well as the exemption amounts for estate, gift and generation-skipping transfer (GST) taxes. These figures are adjusted annually for cost-of-living increases.

Below is a summary of the 2020 figures. The original news release from the IRS may be found here.

Thomson Reuters recently published its estimated figures for 2019 for estate and trust income tax brackets, as well as the exemption amounts for estate, gift and generation-skipping transfer (GST) taxes. These figures are adjusted annually for cost-of-living increases.

Pursuant to the Tax Cuts and Jobs Act, the measure of inflation has changed for these figures. Thomson Reuters warns that because of errors and ambiguities in the act, the estimates were made based upon what Thomson Reuters staff believed to be consistent with congressional intent.

On December 22, 2017, President Trump signed into law what is commonly known as the Tax Cuts and Jobs Act of 2017 (2017 Act). The 2017 Act increased the estate, gift, and generation-skipping (GST) transfer tax exemptions to $10 million, indexed for inflation ($11.18 million for 2018), and retained the estate/gift/GST tax rates of 40 percent. The gift tax exemption is now significantly larger than it has ever been, and larger than it was ever expected to be. Below are 10 things to consider in determining whether to make a gift to take advantage of the existing $11.18 million gift tax exemption. In addition to the tax benefits, making a gift during your lifetime allows your children or other beneficiaries to benefit from the gift, and you will also benefit by seeing them enjoy it.

On Dec. 22, 2017, President Trump signed into law what is commonly known as the Tax Reform and Jobs Act of 2017 (2017 Act). As explained in more detail below, the 2017 Act increased the estate, gift, and generation-skipping transfer (GST) tax exemptions. This legislation expires at the end of 2025 and the tax laws will revert to where they stood prior to the 2017 Act unless Congress makes additional changes before then.