Planning for Anticipated Transfer Tax Changes
May 20, 2021
With every new Presidential administration comes new policy priorities, few more anticipated (for good or ill) than tax policy. Major tax legislation passed in the last administration doubled the exclusion from federal estate tax from $5 million adjusted for inflation ($5.49 million per individual in 2017) to $10 million adjusted for inflation ($11.7 million per individual in 2021). With the rule allowing portability of exemption between spouses and a step-up in cost basis for appreciated assets at death, current transfer tax law potentially allows up to $23.4 million in assets to pass from a married couple free from estate or capital gains tax. The change in executive branch control and the slimmest of Democratic majorities in Congress portends possible changes to transfer taxes.