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2018 Tax Law Changes- Estate and Trust Provisions

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Estate and Trust Provisions

Tax Rate Structure

Rates

Estate and Trusts

 

10%

Up to $2,550

 

24%

$2,550 to $9,150

 

35%

$9,150 to $12,500

 

37%

Over $12,500

 
  • Doubles the basic exclusion amount for gift and estate tax purposes from the current exclusion of $5.49 million in 2017, as indexed for inflation, to $11.2 million, which will be indexed for inflation.
  • Lowers the gift tax rate to a top rate of 35%.
  • Repeals the estate and generation-skipping transfer taxes, while retaining the stepped up basis rules, in 2024.

Observations

The new high exemption amount will effectively eliminate the estate tax for most people. The step-up in basis at death would continue to be in effect.

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