2019 Year-End Tax Guide

THE MARCUM 2019 YEAR-END TAX GUIDE | www.marcumllp.com

GIFT AND ESTATE TAX CHANGES UNDER THE TAX CUTS AND JOBS ACT: TRANSFER MORE WEALTH TAX-FREE

The Tax Cuts and Jobs Act (TCJA) of 2017 introduced a wide array of changes to most areas of the tax law beginning with the 2018 tax year, including gift and estate taxes. Under the Act, taxpayers have the opportunity to reevaluate their gifting techniques and estate plans in order to maximize tax savings and transfer more of their wealth tax-free. ANNUAL EXCLUSION The 2019 annual gift exclusion is $15,000. This exclusion is the amount that can be gifted per person per year tax-free. In addition, married couples can elect to split gifts. Utilizing this strategy, married taxpayers can gift up to $30,000 to an individual in 2019 before a gift tax return is required. Annual

gifting is an excellent way to reduce the value of a taxpayer's gross estate over time, thereby lowering the amount subject to estate tax. LIFETIME EXEMPTION The 2019 lifetime gift exemption is $11,400,000 (indexed for inflation), which has increased significantly from the $5,490,000 exemption amount in 2017. This exemption is the total amount that can be gifted over the course of a donor’s entire lifetime tax-free. The Act more than doubles the lifetime exemption, but it is scheduled to sunset at the end of 2025 unless Congress renews this provision. If not, the prior exemption amount will be restored, as indexed for inflation.

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