What is the estate tax?
The U.S. Estate Tax is a tax on the transfer of property after death.
The Tax Cut and Jobs Act doubled the estate tax exemption in 2018 to $11,180,000 per individual. A historical jump. By providing in the law indexing for inflation, the exemption is $11,580,000 for 2020.
Use it or lose it?
The estate exemption increase sunsets at the end of 2025, unless Congress takes action to change sooner.
In November 2019, the IRS issued regulations that wouldn’t “clawback” or penalize those who die in the future for past gifts that exceed their exemption at death. This ruling gives taxpayers assurance that any current planning they do for large gifts will hold up.
If the exemption is changed by Congress or expires, taxpayers who do not make gifts while this is the law may lose out on a valuable benefit.
Estate Tax Calculator
The C3 Financial Partners website features an estate tax calculator designed to help you easily calculate your potential estate tax. Design your “what ifs” by selecting a growth factor and an inflation factor for the estate exemption. Also, see the impact of the change for when the law is scheduled to sunset. Displayed in a graph or spreadsheet format.
The information entered into the system is not captured and/or saved in our system. So, please print your results for future reference.
Please note this is meant to be a tool for discussion purposes and not intended to provide tax and/or legal advice.