More on the Tax Proposal

A bit more clarity, and a bit of a surprise.

• The applicable federal exclusion amount would be raised to $10 million per taxpayer beginning 1/1/2018 [up from the current 5.49 million or the scheduled $5.6 million for 2018.]
• The federal estate tax would completely disappear on 1/1/2024.
• The federal GST tax would completely disappear on 1/1/2024.
• Beginning on  1/1/2024 the federal gift tax rate would drop from 40% to 35%. Thereafter the gift tax exemption would remain at $10 million per taxpayer.
• An increase in the income tax basis of assets on the death of the asset owner would not change from the current rules- in short,  ‘step-up’ in basis is alive and well.
• Rules associated with the non-recognition of gain on the sale of a principal dwelling under IRC 121 [$250,000 per owner, $500,000 per married couple] would be tightened. To qualify for non-recognition, the home would have to be held for 5 of the prior 8 years, which is a much longer ‘holding’ period than the current non-recognition rules of IRC 121 [2 out of the past 5 years] with what sounds like some dollar cap/phase-out on the non-recognition maximum.