The revised text of the  “Tax Cuts and Jobs Act” (H.R. 1) was released by the joint conference committee last Friday (12/15/2017), and the Republicans seem to have enough votes in the House and the Senate to pass the bill this week without any Democratic votes (although that could change).

A brief preview of provisions affecting estates and trusts:

• The estate tax basic exclusion amount (i.e., the unified credit exclusion) will be doubled, but only for gifts and estates in the years 2018 through 2015.  Because of a change in the way future inflation adjustments are to be made, using the “chained consumer price index” instead of the regular CPI-U, the exclusion amount will most likely be $11.18 million in 2018 instead of $11.2 million.  And the Treasury will be instructed to adopt regulations to prevent people who make gifts with the larger exclusion from having to pay estate or gift tax on those gifts when the exclusion goes back down.
• No income tax deductions will be allowed for miscellaneous itemized deductions (which includes deductions for the administration of income-producing property) for the years 2018 through 2025, which means that estates and trusts will not be entitled to any income tax deductions for legal fees or other administration fees that were previously subject to the 2% floor on miscellaneous itemized deductions.  It is not yet clear whether estates and trusts will be able to continue to deduct expenses that were not subject to the 2% floor (i.e., expenses described in IRC section 67(e) “which would not have been incurred if the property were not held in such trust or estate”).
• The income tax brackets that apply to estates and trusts have not changed much, but the top rate will be reduced to 37% from 39.6%.
• Estates and trusts will also be subject to the $10,000 limitation for the years 2018 through 2025 on income tax deductions for state and local income taxes unrelated to a trade or business and property taxes unrelated to the production of income.

[Updated (12/19/2017) to revise description of limitation on state and local taxes.]