The IRS released its proposed regulations on November 23 to include the increased basic exclusion amount (BEA) per the Tax Cuts and Job Acts (TCJA).
Under the newly enacted Tax Cuts and Jobs Act, the Federal estate, gift and generation-skipping tax (GST) lifetime exemption amounts have now increased to $11.2 million for individuals and $22.4 million for married couples. After increasing with inflation each year through 2025, the exemption amounts will revert back to the 2017 levels ($5,490,000 and $10,980,000) on Jan. 1, 2026. These substantial, yet temporary, increases in the exemption amounts present a unique opportunity for the implementation of various estate planning techniques that will allow the transfer of wealth to future generations.
Republicans have unveiled their proposed tax plan today. The proposal includes a path to repeal the US federal estate tax. This should be of interest to wealthy individuals, including foreign nationals investing in the US through US corps, real estate, and/or other activities.
With ever-growing globalization, wealthy families have taken the opportunity to live and maintain homes all across the world, including in the United States. One of the potential challenges facing such individuals is planning their estates in an effort to maximize tax efficiencies and to retain their hard-earned wealth.
If you are a recent widow or widower who thought you missed out on the opportunity for your spouse's estate to make a portability election or perhaps did not think you had a need when your loved one died, the IRS has given you another chance. Earlier this month, the IRS provided a way for the estate of a decedent who was married at the time of death to make a late portability election through recently issued Revenue Procedure 2017-34.
A United States citizen dies in the United Kingdom having spent a significant number of years living and working in the UK. To which country or countries will estate taxes be payable?
Fortunately, in the case of the US and the UK there is an estate tax treaty that has mechanisms to prevent double taxation.
According to UHY partner Christopher Byrne, the US / UK Estate Tax Treaty uses domicile primarily as the bases of estate taxation. The exception is real property and business property of a permanent establishment. Those are taxed based on location.
The IRS has issued a new taxpayer friendly procedure for certain estate tax returns that missed the filing deadline to obtain the portability election. Rev. Proc. 2017-34 provides a simplified method to receive an extension of time to make a portability election if you didn't file the 706 return on time. A portability election allows a deceased taxpayer to transfer any unused gift/estate tax exemption amount (currently the maximum is $5,490,000 in 2017) to their surviving spouse.
President-elect Donald Trump has promised to introduce a tax plan that includes estate tax repeal as a priority in his first 100 days, however several questions must be addressed before repeal becomes reality.
Last summer, proposed changes to Section 2704 of the Internal Revenue Code appeared to be tightly constraining the benefits of certain transfers of family-controlled business assets by eviscerating discounts that might be available to such transfers. The proposed changes caused a visceral reaction within much of the accounting, financial planning and legal industries as it started a clock on implementing those strategies before a potential change.
After the most significant election in our nation's history, the votes are in and Republican nominee, Donald Trump has been elected to become the 45th president of the United States. President-elect Trump's tax plan looks to reduce taxes across the board, including making the business tax rate more competitive and creating new opportunities to grow our economy. Before any proposed changes can be made, they must be approved by Congress.