Thomson Reuters Checkpoint Calculates Projected Inflation-Adjusted Figures for Estate and Gift Taxes for 2020

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Based on the inflation measure provided by the Tax Cuts and Jobs Act and Consumer Price Index for the 12-month period ending August 31, 2019, Thompson Reuters Checkpoint has released their projected inflation-adjusted Estate, Gift, GST tax, and other exclusion amounts for 2020, as follows:

The unified estate and gift tax exclusion amount (gift and estate tax exemptions) for gifts made and decedents dying in 2020 will be $11,580,000 (up from $11,400,000 in 2019).

The generation-skipping transfer (GST) tax exemption for transfers made in 2020 will be $11,580,000 (up from $11,400,000 in 2019).

The gift tax annual exclusion amount for gifts made in 2020 will be $15,000 (the same amount as for gifts made in 2019 and 2018).

The annual exclusion for gifts to noncitizen spouses in 2020 will be $157,000 (up from $155,000 in 2019).

The special use valuation reduction limit for estate of decedents dying in 2020 will be $1,180,000 (up from $1,160,000 for 2019).

The portion of the estate tax that may be deferred on farm or closely-held businesses at an interest rate of 2% per year, after the applicable exclusion amount is applied, will be $1,570,000 (up from $1,550,000 for 2019).

The foreign gift reporting threshold for gifts from a nonresident alien or foreign estate to a U.S. person (other than an exempt Code Section 501(c) organization) will be $100,000; the foreign gift reporting threshold for gifts from foreign corporations and foreign partnerships to a U.S. person (other than an exempt Code Section 501(c) organization) will be $16,649 in 2020 (up from $16,388 for 2019).

The threshold in 2020 for an individual to be deemed a “covered expatriate” is an “average annual net income tax” of more than $171,000 (up from $168,000) for the five tax years ending before the date that the individual ceases to be a U.S. citizen or lawful permanent resident (i.e. green card holder).

The exclusion amount for the gross income of an individual for the mark-to-market deemed sale rules (which deem all of the property of an expatriate to be sold on the day before expatriation for its fair market value) will be $699,000 (up from $693,000 in 2019).

The foreign earned income exclusion amount in 2020 will be $107,600 (up from $105,900 in 2019).

Additional information on these and other projected tax related inflation-adjusted figures for 2020 can be found in the 2020 Inflation-Adjusted Figures Report available here.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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