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April 26, 2022

IRS issues proposed regulations addressing TCJA changes to basic exclusion amount for estate and gift tax

The IRS has issued proposed regulations (REG-118913-21) that would amend estate tax regulations on the basic exclusion amount (BEA) used in computing federal estate and gift taxes. The proposed regulations would affect estates of decedents dying after 2017 and before the BEA is reduced (presumably in 2026). The Tax Cuts and Jobs Act (TCJA) increased the BEA from $5m to $10m for decedents dying and gifts made in calendar years 2018–2025; the BEA will revert to $5m, adjusted for inflation, on January 1, 2026. A Tax Alert is forthcoming.