January 13, 2020
Authored by: Linsey Glosier and Tiffany McKenzie
The Treasury Department issued final regulations on November 26, 2019 (Treasury Decision 9884) confirming that taxpayers will not be subject to “clawback” of the value of their pre-2026 gifts of the temporarily increased gift and estate tax exemption.
Pursuant to the final regulations, taxpayers will be able to use (prior to 2026) the full increased gift and estate tax exclusion that became available beginning in 2018 under the citing the Tax Cuts and Jobs Act (TCJA) without concern that the IRS may attempt to include gifts that exceed the post-2025 exclusion amount in the taxpayer’s taxable estate at death. This concern that lifetime gifts in excess of the exclusion amount at death might be included in the taxable estate of the decedent has come to be known as “clawback.” The TCJA itself directed the IRS to publish regulations clarifying the clawback question and