IRS Provides Much Needed Guidance to Individuals Making Recent Large Gifts

By Jeff Pannell, CPA, MST

Through recent proposed regulations on November 20, 2018, the IRS has noted that, for individuals who took advantage of the increased gift and estate tax exclusions from 2018 to 2025, there will be no claw back when current exemption levels are set to decrease after 2025.

In general, estate tax planners across the board felt that this proposed scenario would be the case but were relieved nonetheless to receive official IRS confirmation.  The proposed regulations are currently open for public comment.

The dollars at stake are enormous since the 2017 Tax Cuts and Jobs Act (TCIA) temporarily increased the basic exclusion amounts from $5 million to $10 million per person .  With inflation adjustments, the 2018 basic exclusion is $11.18 million and was, after 2025, set to revert to the 2017 level of $5 million as adjusted for inflation.

In summary, the planning mantra may very well be to take advantage of the current exemption while you can—and before it expires.

For more information on estate planning, please contact your Clark Nuber Tax professional or Jeff Pannell.

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