- Death and Taxes: House Bill Eliminates "Death" Tax in 2024
- November 22, 2017 | Authors: B. Michael Mauldin; Robert E. Box; Miriam Wogan Henry; B. Trevor Wilson; Jonathan R. Katz; David F. Edwards; John W. Gant; Robert R. Casey; Robert Childress Walthall; William E. Dossett; John C. Blackman; Linda Bounds Keng
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On November 2, 2017, the U.S. House of Representatives' Ways and Means Committee released its proposal for tax reform via the Tax Cuts and Jobs Act. The House's draft legislation contains a number of provisions that, if enacted, would significantly change the wealth transfer landscape, including the total repeal of the estate and generation-skipping transfer taxes as of January 1, 2024.
Under the proposal, commencing on January 1, 2018, the individual lifetime gift and estate tax exemption amount will be doubled to $10 million ($20 million for married couples), indexed for inflation—$11.2 million per person in 2018 ($22.4 million for married couples). This increase in the exemption amount also applies to the generation-skipping transfer tax.
The draft legislation calls for a total repeal of the estate and generation-skipping transfer taxes as of January 1, 2024, while preserving the ability of beneficiaries to obtain a basis adjustment as to inherited property. Although the gift tax is set to remain in place, a reduction in the rate from 40% to 35% is provided for. Similarly, the annual exclusion—scheduled to increase to $15,000 per individual in 2018 ($30,000 for married couples who elect to split their gifts)—looks certain to survive.