Under the brand-new proposal, coined the Tax Cuts as well as also Jobs Act, the estate tax exemption will double as well as also then be repealed as of 2024.
In addition, there could continue to be a “step-up in basis,” which means if you inherit shares of stock, for example, as well as also turn around as well as also sell those shares, you wouldn’t pay any capital gains taxes either.
“of which’s a double win for the beneficiaries,” said Bill Smith, managing director at CBIZ MHM. “the item could be hard to argue of which’s a benefit for the middle class.”
Because of the sky-high threshold, only the wealthiest Americans at This particular point pay the federal levy. The Tax Policy Center estimated there were about 11,310 estate returns filed as well as also about half of those were taxable for 2017. Still, the amount of tax collected on those returns was just under $20 billion, the Tax Policy Center said.
However, any tax code modifications could just as easily be undone from the next election cycle, said Brad Dillon, a senior wealth planner at Brown Brothers Harriman in brand-new York City. “Since the ancient Egyptians there’s been some form of an estate tax,” he said. “We’ll plan as though there will be an estate tax [again] at some point.”
The estate tax has been on a roller coaster since first imposed in 1917, when 10 percent was levied on portions of an estate exceeding $5 million.
At its peak from the 1940s, the item charged 77 percent on portions of more than $10 million, then 70 percent for amounts over $5 million by 1976 to 1982.