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MARKET UNCERTAINTY CREATES OPPORTUNITIES FOR ESTATE AND GIFT STRATEGIES

MARKET UNCERTAINTY CREATES OPPORTUNITIES FOR ESTATE AND GIFT STRATEGIES

The Tax Cuts and Jobs Act (TCJA) increased the amount of the estate/lifetime gifting exemption through the year 2025. For 2020, the exemption amount is $11,580,000, effectively allowing a taxpayer to transfer wealth to the next generation of up to that amount tax free. As currently written, after 2025 the exemption amount would revert to pre-TCJA levels, which would be about one half of the current amount.

Uncertainties have created lower values not only in the stock market, but these same uncertainties could also affect the valuations of private companies. This has created a potential opportunity for individuals that were planning on gifting shares of publicly or privately held stock. An individual may gift the same overall value as planned, but more shares of a company can be transferred today than what may have been possible one month ago or possibly at the end of the year. Therefore, it may be prudent to evaluate whether any transfers of stock that were planned in the near term should be accelerated to today.

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