As we send this newsletter to press, the House Committee on Ways and Means released its tax reform plan, the Tax Cuts and Jobs Act (the "Act"), and the Senate Finance Committee has released policy highlights of the Senate version, both of which would affect the estate, gift and GST exemptions in 2018 and beyond.

Estate, Gift and GST Taxes

Beginning in 2018, in both the House and Senate versions of the Act the federal estate tax, gift tax and GST exemptions would double to $11,200,000 for decedents dying after December 31, 2017, and will continue to increase with inflation in each subsequent year. In the House version only, the estate tax and GST tax would be eliminated permanently after 2024 (the gift tax would remain in place but the top federal gift tax rate would be lowered after 2024 to 35% from the current 40% rate). The Senate version does not provide for the repeal of the estate tax and GST tax. Additionally, as in current law, beneficiaries who receive property from an estate still will receive a new basis for income tax purposes equal to the property's fair market value as of the date of death. That means that any appreciation in the value of assets over a decedent's lifetime escapes being subject to capital gains taxes on that appreciation when the property is sold after death.