Tax Planning Strategies for the 1% Are a Gamble

Families with $30 million to $60 million in low-cost-basis assets must put their chips down on one of two bets: Count on the current high federal estate tax exclusion amounts being extended or wager that they will sunset in 2026.

(Image credit: Jeffrey Coolidge)

The Tax Cuts and Jobs Act of 2017 (TCJA) became law in 2018 and gave wealthy families a lot to celebrate. In addition to many tax reforms that benefit most taxpayers, the TCJA increased the federal estate and gift tax lifetime exclusion amount from $5 million per person to $10 million per person (plus annual inflation adjustments). Those annual adjustments result in an effective exclusion amount for 2020 of $11.58 million per person and over $23 million per married couple. With portability, a surviving spouse can add a deceased spouse’s unused exclusion to his or her own.

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If TCJA does not sunset
Lifetime Gifts*Estate at DeathCapital Gains TaxEstate TaxTotal Tax
Swipe to scroll horizontally
If TCJA sunsets
Lifetime Gifts*Estate at DeathCapital Gains TaxEstate TaxTotal Tax

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Timothy Barrett, Trust Counsel
Senior Vice President, Argent Trust Company

Timothy Barrett is a Senior Vice President and Trust Counsel with Argent Trust Company. Timothy is a graduate of the Louis D. Brandeis School of Law, past Officer of the Metro Louisville Estate Planning Council and the Estate Planning Council of Southern Indiana, Member of the Louisville, Kentucky, and Indiana Bar Associations, and the University of Kentucky Estate Planning Institute Committee.