7. Estate Tax Dodges a Bullet (again)
Efforts to kill the federal estate tax fell short, but the new law doubles the amount that can be left to heirs tax-free in 2018, to about $11 million for couples and about $22 million for married couples. The amount will rise each year to keep up with inflation.
But, as with many changes in the law, this one expires at the end of 2025, when the tax-free amount will revert to earlier levels.
The law does not change the rule that “steps up” the basis of inherited property to its value on the date the benefactor died. As in the past, any appreciation during the life of the previous owner becomes tax-free.
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