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NEW TAX CHANGES – WHAT YOU NEED TO KNOW

Today, Congress passed a sweeping tax bill, as widely expected over the last few weeks. The bill passed solely along party lines, with no Democrats voting for the bill.  President Trump is expected to sign the bill into law, shortly.

The changes in the transfer tax laws made by this bill are as follows:

  • The gift and estate tax exemption is doubled beginning January 1, 2018, from $5,000,000 per person to $10,000,000, indexed for inflation.  For 2018, this equals $11,200,000 for individuals and $22,400,000 for married couples. The increase applies to the generation-skipping transfer tax exemption, as well
  • The foregoing increase of the gift, estate, and GST exemptions is set to expire in 2026, when the exemptions would revert to $5,000,000/$10,000,000 figures, adjusted for inflation.  This raises the question of whether, upon such expiration, there could be a so-called claw-back/penalty on any gifts made prior to 2026 which exceeded

Summary of Income, Business, and International Provisions in New Tax Bill

November 3, 2017

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Our colleagues in our Tax Advice and Controversy group have also summarized the proposed changes to individual, business, and international taxes in the new bill released on November 2 by the House Ways and Means Committee.

SUMMARY OF NEW TAX BILL PROPOSAL

November 3, 2017

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SUMMARY OF NEW TAX BILL PROPOSAL

November 3, 2017

Authored by: Charles Lin

House Republicans released their new tax bill on November 2, 2017.  As expected for such a significant proposal, the final bill, if passed, will likely look different.  Nonetheless, the bill, in its current form, provides the base starting point from which the House GOP intends to negotiate, both within their party and without.

The changes in the tax bill related to transfer taxes are as follows:

  • The transfer tax exemption for gift, estate, and GST purposes is doubled in 2018, from $5,000,000 per person to $10,000,000, as previously indexed for inflation – $11,200,000 per person – and indexed from there.
  • The estate and generation-skipping transfer tax will be fully repealed on January 1, 2024.
  • “Step-up” basis on death for income tax purposes of inherited property (presumably other than retirement plan benefits and other items of “income in respect of a decedent”) would remain in effect, even after 2023,

Treasury to Withdraw Proposed IRC §2704 Regulations

Treasury to Withdraw Proposed IRC §2704 Regulations

October 26, 2017

Authored by: Andrew Bleyer and Larry Brody

The Department of the Treasury has withdrawn the controversial proposed regulations for Section 2704 of the Code.  Section 2704 limits valuation discounts in family-controlled entities for certain lapsing rights and restrictions.  The proposed Regulations would have expanded the scope of Section 2704 by adding a new classification of disregarded restrictions and by narrowing several longstanding exceptions.  Comments submitted after the regulations were proposed complained that the requirements were unclear and that the impact on state law was difficult to predict.  On October 2, 2017, the Department of the Treasury submitted a report recommending that the proposed 2704 Regulations be rescinded and today the proposed Regulations were officially withdrawn by notice published in the Federal Register (82 FR 48779).

IRS Gives Relief to Victims of Hurricane Harvey

September 1, 2017

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Due to the devastation and upheaval caused by Hurricane Harvey, the Internal Revenue Service is providing extra time for certain individuals and businesses to file their returns and pay taxes.  Among the relief provided is a new January 31, 2018 filing deadline for individual taxpayers who have valid extensions until October 16 and businesses which have extensions until September 15.  According to IR-2017-135:

“The IRS is now offering this expanded relief to any area designated by the Federal Emergency Management Agency (FEMA), as qualifying for individual assistance. Currently, 18 counties are eligible, but taxpayers in localities added later to the disaster area will automatically receive the same filing and payment relief.”

The IRS has set up a landing page to assist victims of Hurricane Harvey.

Update: The IRS has extended similar relief to victims of Hurricane Irma.  

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