North Carolina voters likely know that a debate has been brewing regarding the enforcement of estate and gift taxes. Donald Trump inquired about the possibility of repealing the federal estate tax. It is suggested that if this tax is repealed, it may be altered in a couple of ways based on the new president’s decisions. However, implications are made suggesting that instead of the tax being a general tax it would be a capital gains tax. This tax is termed “deemed sale at death”, although it’s not certain what the tax will be targeted towards.
There may be a possibility that the tax might be applied to appreciated assets if the exemption is based on a specified dollar amount guideline. It is also suggested that marital and charitable transfers could be excluded from the tax enforcement.
Whichever way the tax will be targeted, challenges may arise when payment time comes. This is due to the differences in how estate taxes are estimated and assets are reported. If a reduced estate tax is on the agenda, the process of may be easier than anticipated. Congress may also be in agreement with repealing the estate tax but time will tell if the proposal is similar to the one Trump has discussed.
Estate planning often requires keen knowledge about estate tax issues. Although since the federal exemption is close to $6 million and thus most families don’t have to concern themselves with this matter, this could change, and they may want to have their attorneys review their current documents to see if any revisions may need to be made.