Dickson, TN asked in Estate Planning and Tax Law for Tennessee

Q: What happen in 2026 to large gifts made in 2019?

So let’s say that in 2019 I gift $1,015,000 to my son. This gift is $1,000,000 over the annual gift exclusion. That means I will need to report it to the IRS. However, I won’t immediately have to pay tax on that gift. Instead, the IRS deducts that $1,000,000 from my lifetime gift tax exemption. Assuming I have never made any other gifts over the annual exemption, my remaining lifetime exemption is now $10.2 million ($11.2 million minus $1,000,000).

However, in 2026, the life time exclusion will revert to the 2017 level of $5 million as adjusted for inflation.

Question: Will I (my estate) still have the $5 Million lifetime exclusion or some lesser prorated amount?

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1 Lawyer Answer
Bruce Alexander Minnick
Bruce Alexander Minnick
  • Estate Planning Lawyer
  • Tallahassee, FL

A: No one on this planet could possibly answer this question. You are seeking a definitive answer to a question about death taxes, which are subject to legislative change day by day--at the whim of those in power in Washington. Why worry about things that may or may not happen between now and the year 2026--when you have plenty to worry about today.

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