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Affluent Estates, Attorney, Basic Exclusion Amount, Common Estate, Common Estates, Congress, Estate Tax, Estates, Federal Exclusion Amount, Gift Tax, Inflation-Adjusted Exclusion Amount, New Tax Law, State Estate Tax, State Exclusion Amount, The Common Executor
On December 22, 2017, Congress passed a new tax law that includes doubling the estate tax and gift tax basic exclusion amount. According to the IRS, the new tax law increases the basic exclusion amount from $5 million to $10 million. Additionally, the new exclusion amount will be in effect from January 1, 2018, until December 31, 2025, while the annual adjustment for inflation will continue. (As of this writing the IRS has yet to determine the inflation-adjusted exclusion amount for 2018. Presumably, it should be around $11,200,000.00).
So, what does this change mean for the common estate? Well, as defined by The Common Executor, the common estate remains the same. However, depending on where a person lives, affluent estates may qualify as a common estate. Accordingly, while the rules for the estate tax and gift tax remain the same as described in the article The Estate Tax and Gift Tax: The Impact on your Estate, the new tax law has a minimal effect on the common estate.