HOLIDAY GIFT FROM THE IRS – NO CLAWBACK WORRIES

Similar to concerns in 2012 when there were concerns about a reduction in the unified credit, the 2026 sunset of the $5 million increase in the unified credit basic exclusion amount for gift and estate taxes under the 2017 Tax Cuts and Jobs Act (TCJA) has created concerns about what happens to taxpayers who use all or part of the $5 million increase in the period after the 2026 sunset. In a holiday gift to taxpayers, the Treasury Department has issued a notice of proposed rulemaking that should ameliorate most, if not all, concerns of clawback and related adverse impacts on gift and estate tax computations and amounts.

The Treasury Department announcement indicates four areas of concern. It then notes that three of these areas are nonissues under current law requiring no regulatory attention, and then provides proposed modifications to the regulations to address. . .

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