The IRS recently announced that individuals taking advantage of the increased exclusion amounts will not be adversely impacted when the exclusion amount is scheduled to drop to the levels they were at prior to 2018. The exclusion amount has been increased from $5 million to $10 million for tax years 2018 through 2025, with both dollar amounts adjusted for inflation. In 2026, the exclusion amount will revert to the 2017 level of $5 million, as adjusted for inflation.
There was previous concern that the IRS would “claw-back” large gifts made during this time period. However, based upon the IRS’s announcement, individuals planning to make large gifts between 2018 and 2025 should now be able to do so without concern that they will lose the tax benefit of the higher exclusion level once it decreases after 2025.
To access the IRS announcement, follow the link below:
https://www.irs.gov/newsroom/treasury-irs-making-large-gifts-now-wont-harm-estates-after-2025
Contact the estate planning attorneys at Lynn Jackson today to discuss whether taking advantage of the increased gift and estate tax exclusions are in your best interests.
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