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When the Tax Cuts and Jobs Act passed in December 2017, the Basic Exclusion Amount for estate and gift tax was temporarily doubled to $10M (adjusted for inflation) until 2026. As the end of this increased exemption period draws closer, taxpayers and their advisers must begin planning for how to use the temporarily increase exemption or risk forever losing this multi-million dollar tax benefit. In this course, we will review the statute and regulations governing this temporary increase and discuss popular estate planning methods for using the exemption before it expires.
Topics Covered
- Review of the Tax Cuts and Jobs Act temporary increase of the basic exclusion amount and the associated regulations
- Explanation of the most common techniques used by taxpayers to use the excess basic exclusion before it returns to its pre-TCJA level
- Explanation of the intersection of the deceased spouse's unused exclusion with the reduced basic exclusion amount
- Summary of timing considerations for transactions in light of the possible extension of the TCJA exemption level
Learning Objectives
- Understand the changes implemented by TCJA to the basic exclusion amount and the impact on taxpayers when the exclusion returns to pre-TCJA levels
- Analyze the potential types of transfers that a taxpayer should consider to lock-in the increased exclusion and powers to avoid inclusion in the gross estate
- Recommend gifting transactions and preset the pros and cons related to various gifting scenarios
- Identify tax saving opportunities and clients who should consider large gifts before 2026
Level
Intermediate
Instructional Method
Group: Internet-based
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
A basic understanding of estate tax will be helpful before taking this course.
Advance Preparation
None
Instructor
Klaralee R. Charlton
Klaralee Charlton is a Partner at 3i Law in Denver, Colorado. She practices fiduciary tax, estate administration, and business transactional law. As part of her practice, she guides clients through the process of administering a loved one’s estate including the collection, valuation, management and transfer of assets including financial accounts, real estate, and business interests with a focus on minimizing estate and income tax liability. Klaralee also works closely with trustees of ongoing trusts to ensure compliance and prepares clients’ fiduciary income tax returns annually.
Klaralee has written and lectured on topics including estate and gift tax, fiduciary income tax reporting and U.S. regulations governing the valuation of small family businesses. She is an active member of the Colorado Bar Association, Tax Section and Adjunct Profession at the University of Denver, Graduate Tax Program.
She earned her J.D. in 2011 from the University of Utah, S.J. Quinney College of Law, her LL.M. in Tax Law from the University of Denver in 2013, and her B.A. in political science in 2009 from Bryn Mawr College. She is admitted to practice in both Colorado and Montana.