The first shot has been fired in the Tax Wars. In the Republican’s new bill, two items are relevant to Estates and Trusts.
First, the estate tax is repealed effective 12-31-23. The exclusion is doubled until then to $10M per person ($11.2M adjusted for inflation). Second, there are no changes to the current Retirement Account provisions.
The changes to the Estate tax also eliminate the Generation Skipping Taxes. Notable, the repeal of the Estate Tax does not have a provision subjecting the assets to income tax on their appreciation and it still gives a full step up in basis to FMV. The gift tax remains in place with the adjusted exclusions at a 35% rate.
We should expect changes in these provisions before a final bill is approved.