The Uncertainty of Taxes When it Comes to Death

Benjamin Franklin coined the well-known saying that death and taxes are the only things certain in life, but that doesn’t mean the combination of the two are certain. The Tax Cuts and Jobs Act of 2017 temporarily doubled the exclusion amount for estate and gift taxes. Without further legislative action, this amount will revert to the previous exclusion of $5 million in 2026.

The increase in the exclusion will decrease federal tax revenue by $83 billion according to an estimate by the Joint Committee. Specifically, there have been explanations that the decrease will be caused by the unlimited spousal deduction or as a result of careful estate planning, in essence causing the estate tax to become a “voluntary tax.”

The presidential election of 2016 saw a large push for the complete elimination of the estate tax. However, with the unlimited deduction for charitable organizations, the disappearance of the estate tax will cause charities to lose this source of revenue.

See Roger Russell, The Uncertainty of Taxes When it Comes to Death, Accounting Today, May 8, 2018.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.