Use It or Lose It…Maybe: Gift Planning Considerations in an Unpredictable Election Year

这是全球流行病肆虐的一年, 激烈的社会正义运动, 动荡的市场和对党派路线的顽固忠诚, the 2020 presidential election seems to be as unpredictable as the year itself. 民主党应该控制国会吗, it is almost certain that one of the first pieces of Trump administration legislation to face scrutiny will be the Tax Cuts and Jobs Act of 2017 (TCJA).

Among the significant provisions of the TCJA was the doubled gift tax lifetime exemption. This exemption allows taxpayers to make gifts of up to a certain cumulative value throughout their lives and avoid transfer taxes on those gifts. It is well-settled that Democrats favor higher gift taxes and lower exemptions, 而共和党人则相反.

The TCJA perfectly illustrated this paradigm by increasing the gift tax lifetime exemption from approximately $5 million to $10 million. When indexed for inflation in 2020, that amounts to approximately $11.58 million in gifts a person can make without seeing a cent of gift tax. The exemption is per individual, so it is effectively doubled to $23.已婚夫妇1600万美元. 纳税人馈赠超出豁免范围的, the TCJA continues to impose a flat tax rate of 40% on the transfers.

While the TCJA provision is written to sunset on December 31, 2025, a win for the Democrats would likely put the lights out on it much sooner. Presumptive Democratic nominee  former Vice President Joe Biden released his “Unity Task Force Recommendations,详细介绍了他作为总统的经济计划.. Included within those recommendations is lowering the estate tax exemption back to the historical norm. 在统一的遗产税和赠与税制度下. Biden’s recommendation likewise applies to the gift tax exemption.

Although Mr. Biden took a comparatively conservative position against his progressive former opponents regarding estate and gift taxes, the release does not indicate what “historical norm” he intends to revert the exemption back to. 从1997年到2001年，免税额度在60万美元左右. 2002年至2010年，赠与税免税额为100万美元. 在TCJA出台之前，免税额一直徘徊在500万美元左右. 

除了降低免税额, it is also possible that Democratic tax reform could be retroactive to a certain extent. 假设这样的立法在2021年晚些时候出台. It is a real possibility that the act could be effective January 1, 2021, for example. To this end, many taxpayers who contemplated doing some substantial gifting are accelerating those gifting strategies to 2020.

如果你想了解你可以选择的礼物, please do not hesitate to reach out to your Schneider Downs tax advisor.

• http://www.jdsupra.com/legalnews/insight-on-estate-planning-april-may-39849/#:~:text=However%2C%20the%20favorable%20estate%20tax,pre%2D2018%20levels%20after%202025.
• http://joebiden.com/wp-content/uploads/2020/07/UNITY-TASK-FORCE-RECOMMENDATIONS.pdf page 15.
• http://taxfoundation.org/federal-estate-and-gift-tax-rates-exemptions-and-exclusions-1916-2014/; http://www.taxpolicycenter.org/briefing-book/how-do-estate-gift-and-generation-skipping-transfer-taxes-work