In: Accounting
If you can what changes you would make to the current estate tax laws.
Changes expected in the current estate tax laws
With the advent of the tax cuts and jobs act in the recent year, the estate law, gift and generation skipping tax exemptions increased significantly for the US taxpayrs. this provision has be monitor closely for the better ment of th ereforms in this law
As per the current tax law, the higher estate and gift tax excemption will sunset on December 31, 2025 and from the January 1, 2026 the exemption will return to $5 millions adjusted for inflation. and with the inflation it may in between $6 million to $7 million
The new tax law gives some sort of relief to the tax payer taht they belived that they were no longer to estate tax law and gift tax and generation skipping tax.
There are various discussion are made regarding changes in the estate law one of the main is that proposed repealing the step up in basis at death, which could affects the taxpayers.
one major changes that is to reduction in the excemption limit to $3.5 millions and recommended an increases the estate and gift tax rates from the 45% to the 77% and also on recommendation is to fixed the rate to 20% so that less complication and work smoothly.
In oreder to incresae thr revenue part from the estate tax that accelerate the expiration of the increased excemption amounts. this could be used in passing the other legislation coming from the house way and from the various committee.
Due to the unclear position of the curent tax law the future can be set up accordingly:
- DOCUMENTS must be drafted
- for tax prospective the information must be all the time available FOR PLAN and up to the date
- Anothee option is that inheritance law but it is different from the estate law and gift tax law
if cutting down the rates from th ecurrent position than it will helpfiul in increasing the exemption amount $5 millions base amount per person to double amount
However, the wealthy will continue to plan around the estate tax, and help to avoid the federal estate tax limit to 40% and couple plans accordingly.