Thursday, March 25 Senators Sanders and Whitehouse formally proposed a bill which would make changes to the current estate and gift tax system, that apparently has some support among Democratic Senators and Congressmen.

 

While it is our hope that this proposed law will not be enacted, it seems best to “plan for the worst and hope for the best,” given the unpredictable political climate, and the possible changes that may be made if a watered down version of this potent proposed law passes.

The good news is that the reduction of the estate tax exemption amount from $11,700,000 to $3,500,000 would not occur until January 1, 2022.

 

The same timing applies for the proposed reduction of the gift tax allowance to only $1,000,000, which means that people will not be able to gift more than $1,000,000 after 2021 without paying gift tax.

 

Also, the proposed increase in the estate tax rate to 45% once a deceased person’s taxable estate exceeds $3,500,000, and 50% and higher when the amount subject to tax exceeds $10,000,000 will not apply until 2022…