The 2017 tax act increased the federal combined estate and gift tax exmption to
$10,000,000, adjusted for inflation. With inflationary adjustment, the exemption for 2019 will be $11,400,000. On January 1, 2026, the exemption will revert back to $5,000,000, adjusted for inflation. The proposed regulations would provide that taxpayers who take advantage of the increased exemption will not be adversely affected by this decrease in the exemption. This means that a taxpayer who makes pre-2016 gifts to take advantage of the increased exemption will not be forced to pay estate tax on these gifts if the taxpayer dies after January 1, 2026.
Mr. Hendel has been practicing wealth preservation planning for over thirty -five years.