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Keep estate tax exemption portable

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in Small Business Tax

Thanks to the Tax Cuts and Jobs Act (TCJA), only a very small fraction of the population has to worry about federal estate or gift taxes for 2018-2025. Plus, wealthy married couples have the extra tax advantage of exemption portability.

Strategy: Ensure a proper “deceased spousal unused exemption” (DSUE) election. The DSUE election (pronounced “D-Sue”) is made by the estate of the first spouse to die.

As a result, any unused portion of the deceased spouse’s estate tax exemption can be utilized by the surviving spouse’s estate (i.e., it’s portable). Under the TCJA, each exemption is $11.18 million in 2018. Thus, a couple can shelter a whopping $22.36 million from estate tax!

Here’s the whole story: It’s been a long and winding road to estate tax relief. For starters, most transfers between spouses are completely exempt from federal estate or gift tax under the unlimited marital deduction privilege. Other ...(register to read more)

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