Sunday, February 11, 2018
The Tax Cuts and Jobs Act virtually doubled the estate tax threshold. A single taxpayer can now own up to $11.2 million in assets at death without triggering the death tax. Married couples are allowed twice that amount, $22.4 million, as long as they make a timely portability election subsequent to the passing of the first spouse. In addition to this pretty incredible threshold increase, beneficiaries of a decedent’s estate still receive a step up in basis. So, a child receiving a deceased parent’s house would not have to pay tax on the increase in value of the home. This can mean huge savings in taxes, especially when a parent has held on to a home for decades with significant increases in value. While these benefits are exciting for those wanting to pass on property, the misapplication of these new tax rules could potentially incur additional unwanted taxes.
See Melody Juge, Watch out for the Gift Tax Trap in the New Tax Law, MarketWatch, February 1, 2018.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.