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USE IT OR LOSE IT: Philadelphia Tax Exemptions

Top Philadelphia tax lawyer for exemptions

Take advantage of increased gift tax exemptions before the 2026 sunset.

Under the Tax Cuts and Jobs Act we’ve seen an increase of gift and estate tax exemptions which in 2019 are $11.4 million for an individual and $22.8 million for a married couple. Like the carriage in the story of Cinderella which turned back into a pumpkin at midnight, come 2026 these provisions sunset and the estate and gift tax exemptions will revert to $5 million (indexed for inflation).

Recently the IRS stated that there will not be a claw-back for transfers made prior to the sunset so if you’re in a financial position to make gifts at this time the clock is ticking. Also keep in mind that even if President Trump is reelected in 2020, there will be another presidential election in 2024. Only once since Franklin D. Roosevelt’s passing in 1945 has a party kept the White House for a third term. Looking at Democrat proposals for changes to the Internal Revenue Code we see calls for higher estate and gift tax rates and for a lowering of the gift tax exemption to $1 million.

Numerous planning opportunities are now available to those of you who are often referred to as “moderately wealthy” (net worth of $5 million to $40 million), such as the use of a variance of Incomplete Gift Trusts (ING Trusts) that are treated as complete gifts (yes, legalese is strange).

The clock is ticking as the countdown to tax savings is racing towards the sunset. Take action now. Call the offices of the Rabinovich Sokolov Law Group to make an appointment to learn how we can help you to preserve your legacy.

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