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The Window To Gift Is Open

The Window to Gift Is Open

One of the major changes in the 2017 Tax Cuts and Jobs Act was an increase in the estate and gift exemption, which is the amount that one can gift during their life or at death free of taxes.  In 2017, that amount was $5.49 million and with the new tax law the exemption rose to $11.2 million for an individual or $22.4 million for a married couple.

With the tax changes set to sunset in 2026 and the exemption set to readjust down to 2017 levels, the next several years seemed like an opportune time for those with potential estate tax issues to gift away assets.  However, a big question remained unanswered, which is how would gifts made during the period of a higher exemption (2018 through 2025) be treated for estates calculated after 2025.  The primary concern was that an individual could gift assets using the increased exemption without being concerned about the gift tax but that those gifted assets may be subject to a clawback and be brought back into the estate and subject to the estate tax if the estate was then settled after 2025 when the exemption amount resets.

Time to gift

Thankfully the IRS just announced some guidance on this subject and proposed regulations that any gifts made from 2018 to 2025 using the increased exemption would also be free from estate tax in the future – eliminating any concern of a clawback.  Once these regulations are approved, this means we have a limited window to use the exemption or simply will lose it.

Subject to change

As always, these laws are subject to change so we are encouraging folks to utilize their increased exemption amount once the regulations pass. If you are currently gifting assets or think that a gifting strategy may be right for you please contact your Wealth Advisor today.

Important disclosure information

Please remember that different types of investments involve varying degrees of risk, including the loss of money invested. Past performance may not be indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy, including the investments or investment strategies recommended or undertaken by RegentAtlantic Capital, LLC (“RegentAtlantic”) will be profitable.

Please remember to contact RegentAtlantic if there are any changes in your personal or financial situation or investment objectives for the purpose of reviewing our previous recommendations and services, or if you wish to impose, add, or modify any reasonable restrictions to our investment management services. A copy of our current written disclosure statement discussing our advisory services and fees is available for your review upon request.

This article is not a substitute for personalized advice from RegentAtlantic. This article is current only as of the date on which it was sent. The statements and opinions expressed are, however, subject to change without notice based on market and other conditions and may differ from opinions expressed in other businesses and activities of RegentAtlantic. Descriptions of RegentAtlantic’s process and strategies are based on general practice and we may make exceptions in specific cases.

RegentAtlantic does not provide legal or tax advice. Please consult with a legal and or tax professional of your choosing prior to implementing any of the strategies discussed in this article.

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