On Wednesday, December 13, 2017, it was reported that the Republicans have reached a final deal between the House and Senate tax bills. One agreement was to increase the threshold for an estate to qualify as taxable to about $11 million per individual from $5.5 million. Federal estate taxes will be due for only the portion of the estate that exceeds $11 million. There was no change to the federal estate tax rate of 40%.
The House tax bill eliminated the estate tax entirely by 2024. It was reported that there was a need for revenue, therefore, the Republicans agreed to keep the estate tax. The estate tax would raise about $68 billion over 10 years.
Nonetheless, the threshold increase is significant to wealthy families, like many in the Philadelphia area, who try to keep their estates below the threshold to avoid the federal estate tax.
The Republicans believe they will vote on the final tax bill next week. If it passes, then the bill will likely land on President Trump’s desk before Christmas. As a result, the tax bill will likely go into effect on January 1, 2018.
This is the most significant change to estate tax policy in years. Stay tuned and always consult a tax expert like a certified public accountant before relying on any information.
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