Today the IRS issued proposed regulations and a news release providing guidance to individuals who are considering making large gifts to take advantage of the increased gift/estate tax exclusion levels that are effective for 2018 through 2025. The current exclusion amount is now $11,800,000 but is scheduled to revert to pre-2018 levels after 2025 ($5,000,000 as adjusted for inflation). The concern was that an estate tax after 2025 could apply to gifts made during 2018 through 2025 (known as Clawback). The proposed regulations allow an estate to compute its credit using the higher of the exclusion amount available when the individual made the gift or the exclusion amount available upon the individual’s date of death.
Please let us know if you have questions about how this may affect your estate and gift planning.