Document Type

Article

Publication Date

9-1-2025

Description

Excerpt:

Estate planning can be a morbid matter that may only impact a small percentage of taxpayers. However, as CPAs, we are responsible for ensuring our impacted clients are prepared for the possible gift and estate tax changes on the horizon. The Tax Cuts and Jobs Act of 2017 (TCJA) introduced monumental tax reform affecting the gift and estate tax. The gift and estate tax lifetime exemption allows an individual to gift a certain amount tax-exempt during life or at death. Before the TCJA, the lifetime exemption began at a tax base of $5 million, adjusted for inflation ($5.6 million). Following the TCJA, that same exemption doubled to $11.18 million in 2018, adjusted annually for inflation. However, the increased exemption was only enacted as a temporary change, and it is set to expire after Dec. 31, 2025. Any change to this expected sunset date requires an act of Congress. Unless there is a change to the current law, the lifetime exemption is expected to be reduced to approximately $7 million (the original $5 million adjusted for inflation) on Jan. 1, 2026. Thankfully, this is not a race to the “ultimate finish line” before 2026. Instead, the IRS provided a special rule to possibly shelter any gifts taken during the period when the basic exclusion amount was increased.1 To fully take advantage of the current higher exemption amounts, one should consider retaining a knowledgeable estate attorney, tax accountant and valuation specialist now [...]

Copyright Statement

TSCPA does not require copyright assignment or transfer from authors, nor does TSCPA require first publication rights.

Copyright The Author(s). This article originally appeared in the Tennessee CPA Journal.

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