Hello Katz - Here Are Your Articles for Thursday, December 27, 2018
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A Kinder (and Gentler?) IRS?

 

The IRS has just ruled that taxpayers fortunate enough to take advantage of the latest lifetime gifting limit on lifetime and estate property transfers, which had been set at $11,400,000 per person, will NOT be penalized in the future when this limit is set to revert to an inflation adjusted $5,000,000.

 

What this means is that if someone makes total gifts subject to tax during their lifetime totaling $11,400,000 and the limit reverts to $ 5,000,000 (purely for computation simplicity), only the limitation under the reversion will be treated as a taxable gift in computing their taxable estate upon their death.  Commentators had been afraid that previously reported taxable transfers totaling $ 11,400,000 would be added back to the (now) decedent’s estate and would only be offset by the reduced $ 5,000,000 allowable gift/estate transfer limitation.  This will permanently avoid taxes on as much as $ 6,400,000 of gifted property, should this limitation be reduced from its current level, automatic reversion on expiration of the current statutory provision (or, hopefully, by amendment to a lesser amount by a future Act of Congress, but stay tuned for updates in the event this occurs).

 
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Katz Nannis + Solomon PC
Katz Nannis + Solomon PC
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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