Using An Unsecured Loan to Avoid Gift Tax

Estate planning is among the most important areas of tax strategy. It was recently impacted by the Tax Cuts & Jobs Act (“Act”) when the estate tax exemption was increased.  The Act increased the estate tax exemption from $5.5 million to $11.18 million.  Nonetheless, it’s still wise for people to keep up with changes to the law for long-term estate planning. That’s because, the U.S. still imposes a federal estate tax on estates with values above the exemption.  The current maximum tax rate for estates is a hefty 40%.  Accordingly, it’s clearly in the interest of affected individuals to engage in appropriate estate planning as much as possible.   Currently , the U.S. government requires that gifts beyond a certain amount be reported and ultimately included in the estate of the donor. Hence, the “estate tax” is essentially a deferred gift tax.  It prevents wealthy individuals from…

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