On Friday, December 15, 2017, the Conference Committee for the Tax Cuts and Jobs Act released and approved its conference report reconciling the differences between the House and Senate tax reform proposals.
Of particular relevance, the agreement doubles the estate and gift tax exemption ($5 million to $10 million, indexed for inflation) for estates of decedents dying and gifts made after December 31, 2017, and before January 1, 2026.
Though our champions in the House – Chairman Kevin Brady (R-TX) and Representative Kristi Noem (R-SD) – made a valiant attempt to achieve full repeal (as was in the House-passed bill), there was ultimately not the political will in the Senate to get it across the finish line.
In addition to the estate and gift tax provision, a few other key highlights include:
- Top Individual Tax Rate: 37% beginning January 1, 2018, through December 31, 2025.
- Corporate Tax Rate: 21% beginning January 1, 2018.
- Pass-Throughs: 20% deduction that applies to the first $315,000 of joint income – a deduction that is available to trusts and estates – beginning January 1, 2018.
- Corporate Alternative Minimum Tax: Eliminated as of January 1, 2018.
Looking ahead, we expect the Senate, followed by the House, to vote on the conference report early next week, which will allow a final product to reach the President’s desk for signature prior to Christmas. As of now, we expect there is sufficient support in both Chambers to ultimately enact tax reform before year’s end.
We look forward to discussing strategy and next steps in greater detail during our Supporters Meeting this Monday, but stand ready to answer any questions in the interim.