Here is the break down of the Tax Cuts & Jobs Act from the Houser Firm.

1. BY JUSTIN P. HOPKINS
Senior Designer at Milk Made Design

2. FROM JANUARY 1, 2018 TO DECEMBER 31, 2025, THE BASIC EXCLUSION
AMOUNT FOR GIFT AND ESTATE TAXES (MEANING THE AMOUNT THAT
AN INDIVIDUAL CAN GIVE AWAY DURING LIFE OR AT DEATH WITHOUT
PAYING GIFT OR ESTATE TAXES) IS DOUBLED. BECAUSE OF INFLATION,
THAT MEANS THAT IN 2018 THE BASIC EXCLUSION AMOUNT FOR AN
INDIVIDUAL IS $11,200,000. BECAUSE OF THE INCREASED BASIC
EXCLUSION AMOUNT, MANY FAMILIES WILL BE MORE CONCERNED
ABOUT PLANNING FOR INCOME TAXES THAN PLANNING FOR ESTATE
TAXES. ADDITIONALLY, BECAUSE THE NEW DOUBLE EXCLUSION IS SET
TO GO AWAY ON JANUARY 1, 2026, EXPECT A FLURRY OF PLANNING TO
OCCUR IN THE YEAR 2025 UNLESS CONGRESS CHANGES THE RULES
AGAIN.
1

3. The new law does not affect the application of Section 1014, which provides that the cost
basis of assets acquired by a decedent be adjusted to their fair market value at time of
death. This allows for many families to make sure their estates are optimized for
income tax planning.
The new law does not affect the marital deduction or charitable deduction, so
individuals may still give an unlimited amount to spouses (or QTIP trusts for spouses)
and qualified charities without paying gift or estate taxes on that amount.
2
3

4. The new law does not affect the ability of a surviving spouse to use any remaining basic exclusion
amount that wasn’t used when the first spouse passed away. This is called “portability” of the basic
exclusion amount.
However, it is important to note that while a surviving spouse can use portability for estate and gift tax
purposes, there is NO portability allowed for the Generation Skipping Tax Exemption (which is also
$11,200,000 in 2018).
Because of inflation, the Annual Exclusion Amount has increased for 2018 from $14,000 to $15,000 per
donor per done.
4
5
6

5. THE INCOME TAX RATES FOR ESTATES AND TRUSTS WERE
CHANGED, BUT NOT SIGNIFICANTLY. THE CURRENT LAW
CONTINUES, IN MOST CASES, TO FAVOR THE DISTRIBUTION OF AN
ESTATE’S OR TRUST’S INCOME TO THE BENEFICIARY TO HAVE THE
INCOME TAXED AT THE BENEFICIARY’S LEVEL.
UNDER THE NEW LAW, ESTATES AND TRUSTS WHICH HOLD
OWNERSHIP INTERESTS IN “PASS THROUGH ENTITIES” (E.G.,
PARTNERSHIPS AND S CORPORATIONS) ARE ELIGIBLE FOR THE NEW
SECTION 199A DEDUCTION (UP TO 20%) FOR QUALIFIED BUSINESS
INCOME.
7
8

6. A. THOSE WHO HAVE ESTATE PLANNING DOCUMENTS DATED PRE-2012 (THOUGH WE HIGHLY
RECOMMEND AN ESTATE PLAN REVIEW AT LEAST EVERY FIVE YEARS).
B. THOSE INDIVIDUALS OR FAMILIES WHO HAVE A “GROSS ESTATE” (WHICH INCLUDES RETIREMENT
ACCOUNTS AND LIFE INSURANCE) THAT EXCEEDS $11,200,000.
C. THOSE WHO OWN SIGNIFICANTLY APPRECIATED ASSETS (FOR INSTANCE, BOUGHT RANCH FOR
$250/ACRE THAT IS NOW WORTH $2,500/ACRE).
D. THOSE WHO HAVE INTERESTS IN “PASS THROUGH ENTITIES” AND WHO WANT THEIR HEIRS TO BE
ABLE TO TAKE ADVANTAGE OF THE NEW SECTION 199A DEDUCTION.
E. THOSE WHO WANT TO CREATE TRUSTS OR OTHER VEHICLES TO PROTECT ASSETS FOR MULTIPLE
GENERATIONS.
BECAUSE OF THE NEW TAX LAW, THE FOLLOWING SHOULD SCHEDULE A MEETING WITH ONE OF
THE ATTORNEYS AT THE HOUSER LAW FIRM, P.C. IMMEDIATELY FOR A COMPLIMENTARY ESTATE
PLAN REVIEW: