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Tax Cuts and Jobs Act

Provision 11061

Increase in Estate and Gift Tax Exclusion

Overview

Introduction

Estate and gift taxes are excise taxes imposed on the transfer of property, either at death (the estate tax) or while the
transferor (donor/giver) of the property is still alive (the gift tax). The exclusion determines the total amount that can be
transferred during life and at death before any taxes are due.

Under prior law, estate and gift taxes were levied on transfers after applying an exclusion that in 2018 would have been a

$5.6 million per decedent exclusion (the $5 million per decedent amount in the statute adjusted annually for inflation).

The Tax Cuts and Jobs Act of 2017 (TCJA) amended I.R.C. section 2010(c)(3) to increase the basic exclusion amount

from $5 million, indexed for inflation, to $10 million, indexed for inflation, beginning in 2018. Based on this amendment, in

2019 the basic exclusion amount, adjusted for inflation, is $11,400.000. The tax rate is 40 percent. These changes apply
to estates of decedents dying, and to gifts made, after December 31, 2017. The increased basic exclusion amount expires

December 31, 2025 and reverts to 2017 amounts (indexed for inflation).

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