Last Chance to Cut Your Taxes: COVID-19 Breaks Lapse at Year-End
Tax Partner Christopher Boyett spoke with Bloomberg about the twin dynamics of expiring COVID-19 relief and a transition to a new presidential administration that are making the end of this year a turbo-charged version of the usual rush by businesses and households alike to lock in tax reductions. President Donald Trump’s signature 2017 tax cut doubled the exemption from duties on estates, allowing wealthy individuals to pass on more to their heirs tax-free. The exemption for this year is nearly $11.6 million for an individual or twice that for a married couple. Biden has proposed lowering the exemption to $3.5 million. Given Internal Revenue Service guidance that it won’t apply any lower, future exemption retroactively to gifts made under the current limit, taxpayers should set up estate plans now to lock themselves in, Mr. Boyett said.
“Anybody we’ve talked to about estate tax planning in the past 10 years, they’ve called in the past two months,” he said. “With values being temporarily low because of the pandemic and interest rates being low, this is a valuable time to transfer assets.”