We’ve moved! We didn’t go far and look forward to seeing you in our new space located at 1255 Crescent Green Drive, Suite 200, Cary, NC 27518
While there hasn’t been a bill that has passed both chambers of Congress just yet, let’s break down how the House and Senate bills, which have passed in their respective chambers, may impact your estate and your business.
Regardless of which version of tax reform passes and is ultimately signed into law by the President, there is one consistent theme on the issue of the Estate (or “Death”) Tax. Both bills, at least at the outset, will double the current Federal Estate Tax exemptions. You read that correctly. The current exemptions for 2017 are $5.49M and $10.98M for individuals and married couples respectively. Under both bills, we will see those amounts double. That means the number of families actually impacted by the Estate Tax will be substantially reduced. What’s more, the House Bill has the Estate Tax ultimately being repealed in 2024 – the Senate Bill does not. These changes will be consistent for the Gift Tax and the Generation-Skipping Transfer Tax. There does not appear to be any changes being made the the portability rule for decedent’s unused exemptions passing to the surviving spouse. Both bills seem to maintain the charitable deduction for taxes as well, which can be beneficial for estate planning generally, but more so for families facing an Estate Tax liability.
Business tax benefits seems to be spread amongst large corporations and small businesses. For the purposes of this articles, I’ll only be focusing on small business tax reform.
Let’s look at the winners and losers of the potential changes:
Winners: These types of individuals stand to benefit from the tax changes,
Losers: These types of individuals stand to be harmed by the tax changes,
Neither bill has passed, and the final version of the combined bill has not even been drafted. There are some significant differences between both the House and Senate bills, so it’s not clear which provisions will carry the day. Look for updates from our office over the next few weeks as we await a final bill.