For 2018, the federal estate tax exemption will be set at $5.6 million for an individual.
Earlier this month, the Internal Revenue Service announced the federal estate and gift tax exclusions for 2018.
For 2018, the federal estate tax exemption will be set at $5.6 million for an individual and $11.2 million for a couple who elects portability. (For an explanation as to portability click here.) These new rates are up from $5.49 million per individual and $10.98 million per couple in 2017. The generation skipping tax exclusion will also mirror the estate tax exclusion at $5.6 million.
- The annual federal gift tax exclusion will be set at $15,000.00 per individual in 2018, up from $14,000.00 per individual in 2017.
- Married couples can utilize this exclusion and give individuals up to $30,000.00 tax free. This increase in the gift tax exclusion is the first we have had since 2013.
Batson Nolan has received many questions over the past several months whether Congress will repeal the federal estate and gift tax.
While President Donald Trump and Congress are currently taking up tax reform, we don’t know exactly what changes to our tax laws will be implemented, if any.
One tax expert has recently opined that the estate and gift tax repeal may be sacrificed in order to lower income and corporate taxes. Others have said this is the best chance we have had in a generation for these taxes to be repealed.
In our opinion, at Batson Nolan, the best course of action at this point is to continue to plan your estate under the current tax laws. The political winds in Washington constantly change and most experts seemingly agree that even if Congress does eliminate the estate and gift tax, this elimination would not be permanent.
A future president and Congress under different leadership would likely reinstitute these taxes. Consequently, it is likely that the estate and gift tax will be around in some form into the future.