Now that the results are in, what can we expect in the way of policy from the new administration on Estate and Gift Taxes and your Estate plan? These are a few of the highlights in my view.
The Estate Tax may be repealed. That was one plank in the Republican Platform, and with majorities in both houses it is at least likely to get to the floor of the House. The current amount of the Unified Gift and Estate Tax Credit is $5,640,000. As an alternative, Congress may also be raised the amount of the credit to $10,000,000 per person. At any rate, it is unlikely to be lowered as has had been proposed in the Democratic Platform.
If the Trump administration carries through with it’s promise to reduce regulations and burdensome taxes, you can expect Congress to revisit the IRS adoption of amendments to Section 2704 of the Code, that eliminated minority discounts for Family Limited Partnerships and other Estate Planning vehicles used to transfer business interests to children and grandchildren. A bill was introduced in the House this summer to overturn the regulation change but was never considered prior to adjournment this fall.
The subject of Family Limited Partnerships and the tax implications of the amendments to Section 2704 were covered in my Fall 2015 and 2016 newsletters, and can be found at:
http://www.legacyfamilyofficellc.com/legacy-blog/2016/9/1/fall-2015-newsletter.
The Trump Administration is also unlikely to accept the IRS proposal for an increase in Capital Gains Taxes to at least 25%, and to eliminate the “step-up” in basis for inherited assets. This will be beneficial for all taxpayers who pay capital gains tax, not just the ultra-rich.
Though we do not know how much of the Republican Platform tax proposals will succeed, at least they have a chance of becoming law. The result would be a reduction in the estate and business tax burden on families and businesses planning to pass on their hard earned wealth to their children.
Contact me to learn more about FLP’s, minority discounts, and how they can be of use to you and your family.