This bill would eliminate the estate tax — a tax on the ability of a dead person to transfer their property at their death — and the generation-skipping transfer tax, which taxes gifts from dead people to their grandchildren. These taxes would be abolished as soon as this legislation is enacted.
It would also reduce the top rate on gift taxes from 40 percent to 35 percent on gifts of $500,000 or more. A lifetime gift tax exemption would be calculated by increasing $5,000,000 annually by the amount of inflation since 2010 to adjust for increases in the cost of living.
Transfers involving trusts would be treated as a taxable gift unless the trust is wholly owned by the donor or the donor’s spouse.
Currently, individuals are exempt from the estate tax if their assets are less than $5.43 million, while the limit for married couples is $10.86 million, with the top tax rate on income above those levels being 40 percent.