On November 6, 2019, the IRS announced the final estate and gift tax exemption amounts for 2020, as adjusted for inflation. The estate and gift tax exemption for 2020 will be $11.58 million per person, whereas the annual gift tax exclusion amount is unchanged at $15,000. The adjusted estate tax exemption amount means that an individual will be able to shelter up to $11.58 million in assets from estate tax upon his or her death in 2020, and a married couple will be able to shelter up to $23.16 million in assets (assuming that portability is utilized).
Keep in mind, however, that the Tax Cuts and Jobs Act will sunset on December 31, 2025 without further legislation, at which point the increased exemption amounts will return to those in effect in 2017 ($5 million, as adjusted for inflation). In addition, new legislation reducing the estate, gift tax, and GST exemption amounts could be in the works depending on the results of the 2020 election. For examples of some previously introduced bills to this effect, see our two recent blog posts, Dueling Estate, Gift, and Generation Skipping Transfer Tax Senate Bills and Yet Another Estate, Gift, and Generation Skipping Transfer Tax Senate Bill. The moral of this story, therefore, is that the historically high exemption amounts now in effect may not be here to stay.
If you have any questions on this topic, please contact Lin Law LLC at (920) 393-1190.