On November 29, 2021, the IRS issued Revenue Procedure 2021-45, providing inflation-adjustments for various provisions of the Internal Revenue Code.  Those affecting trust and estate planning and administration are as follows:

  • The estate and gift tax basic exclusion amount is $12,060,000 (increased from $11,700,000)
  • The generation-skipping transfer tax exemption is $12,060,000 (increased from $11,700,000)
  • The annual exclusion for gift tax is $16,000 (increased from $15,000)
  • The income tax rates for trusts and estates are:
    • 10% for income not over $2,750
    • 24% for income more than $2,750 but not over $9,850
    • 35% for income over $9,850 but not over $13,450
    • 37% for income in excess of $13,450


Gift to Spouse Recharacterized

In Smaldino v. Commissioner, the Tax Court ruled that a husband’s transfer of a 41% membership interest in a limited…

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New Retention Policy for Estate Tax Returns

The IRS recently announced that effective February 11, 2022, it will no longer keep estate tax returns for 75 years…

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General Assembly Adopts New Income and Principal Act

On February 21, 2022, the Virginia General Assembly completed passage of HB 370 which adopts the Uniform Fiduciary Income and…

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