In December 2017, the Tax Cuts and Jobs Act (the TCJA) was passed, resulting in significant changes across the board for federal taxes: there were changes to individual income tax rates and available deductions, corporate tax rates were cut, major changes were introduced affecting international taxes, and there were big changes affecting estate and gift taxes as well.

The TCJA resulted in an increase in the credit for estate and gift taxes from $5 million to $10 million, both adjusted for inflation (meaning that the first $10 million transferred by gift or bequest is exempt from taxation and anything in excess is subject to a 40% tax on the net value of the gratuitously transferred asset). For 2020, an individual has a credit amount of $11.58 million, which means that the estate and gift tax has effectively been eliminated for all but a very narrow segment of the population. The increase, however, only lasts through 2025, and in 2026 the estate and gift tax credit reverts back to approximately $5 million.

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