Monday, October 5, 2020
Due to the coronavirus, this year will stand out for a very long time due to the "uncertainty and unending personal financial planning." As we are approaching the end of the year, there are some things that you should consider as there may be potential tax law changes.
As of now, the estate, gift, and generation-skipping transfer tax exemption is at an all-time high of $11.58M per person. As this exemption is expected to "sunset" in late December of 2025 (and possibly earlier), now is a good time to consider how to take advantage of the exemption. The IRS has stated that if you take advantage of this exemption now, it will not be "clawed back" even if the exemption is lower in the year that you die.
Another thing to pay attention to is the individual income tax, capital gains, qualified business income deduction, and maximize tax-advantaged accounts. These are great things to look at in regard to income tax planning.
As the end of the year approaches, along with a presidential election, it is not only recommended to consider updating your estate plan, but may be necessary as the opportunities that exist now may not be available next year.
See Alvina H. Lo, Year-End Planning Amid a Year of Uncertainty, Bloomberg Tax, September 25, 2020.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.