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Proposed regulations: Basic exclusion amount, estate and gift taxes

Basic exclusion amount, estate and gift taxes

The U.S. Treasury Department and IRS this afternoon released for publication in the Federal Register proposed regulations (REG-106706-18) addressing the effect of changes made by the new U.S. tax law to the basic exclusion amount used in computing federal estate and gift taxes.


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The proposed regulations [PDF 255 KB] will affect the estates of decedents dying after 2017 and donors of gifts made after 2017.

The new U.S. tax law (Pub. L. No. 115-97, enacted December 22, 2017) amended the basic exclusion amount.  With the new tax law, the basic exclusion amount is doubled from $5 million to $10 million per individual (as indexed for inflation). This enhanced exclusion applies to estates of decedents dying, generation-skipping transfers made, and gifts made after 2017, but is scheduled to sunset after December 31, 2025. The exclusion will be $11.18 million for 2018 and $11.4 million for 2019.

The proposed regulations are scheduled to appear in the Federal Register on November 23, 2018. Comments must be received by a date that is 90 days after November 23, 2018. A hearing has been scheduled for March 13, 2019, and outlines of topics to be discussed at the public hearing also must be received 90 days after November 23, 2018.

Read a related IRS release: IR-2018-229

The purpose of this edition of TaxNewsFlash is to provide text of the proposed regulations.

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