Page 32 - Grapevine SeptOct 2021

In The Winery

Changes to Gift Tax Exemption Laws

Could Affect Winery Estate Planning

By: Kemp Moyer and Sachi Danish, BPM LLP
F or owner-operators of wineries and other wake of the COVID-19 pandemic fallout and federal

closely held businesses, now may be an
response, means the higher lifetime exemption
opportune time to maximize estate planning may be in jeopardy. Many in the tax policy and
through the utilization of gifts of ownership inter- preparation communities are expecting the recently
ests. The Tax Cuts and Jobs Act (TCJA) of 2017 has elected Congress and administration to accelerate
been broadly seen as favorable to businesses, high- the rollback of the exemption increase. Sweeping
net-worth individuals and estates, including the changes have been proposed by the Biden adminis-
temporary doubling of the lifetime federal exemp- tration and now it is widely considered just a mat-
tion for gift, estate and generation-skipping taxes, ter of when and how much. Among the potential
which stands at $11.7 million in 2021. early targets is the larger estate tax exemption,
which will sunset back to pre-TCJA baselines at the
However, the combination of a new administra- end of 2025 without further action from Congress.
tion, as well as increasing federal deficits in the
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