Appraise Assets for Tax Gifting Purposes

By Joseph M. Donegan on October 12, 2012

Many families and small business owners are moving quickly to transfer assets to loved ones while favorable tax rates are still in effect. However, those who fail to appraise gifted assets may face tax consequences if items were improperly valued.

A recent Reuters report noted that appraisers have seen a spike in business in recent months as businesses and wealthy individuals seek out services in preparation of the lucrative gift tax exemption expiring at the end of the year. The current lifetime gift exclusion of $5.12 million – or $10.24 million for married couples filing jointly – is expected to revert back to $1 million in 2013. Further, estate taxes on any amount that exceeds that limitation will be taxed at a 55 percent top rate in 2013, as opposed to the current 35 percent.