Estate Tax Changes Under Recent Tax Acts

This article summarizes the changes made to the federal gift and estate tax and the federal generation-skipping transfer (GST) tax under the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the 2010 Tax Act), the American Taxpayer Relief Act of 2012 (the 2012 Tax Act), and the Tax Cuts and Jobs Act. A chart at the end of the discussion summarizes the effects of this law.

Background

The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) was a sweeping piece of legislation that significantly changed the federal gift and estate tax and the GST tax for the years 2001 through 2010. The maximum tax rates gradually decreased from 55% to 45% (35% for gift tax) and the exclusions/exemptions gradually increased from $675,000 to $3.5 million ($1 million for gift tax). The provisions of EGTRRA repealed the estate and GST taxes (but not the gift tax) for 2010; then, for 2011, EGTRRA provisions expired, effectively reinstating the tax rules that were in effect prior to 2001.

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