Who doesn’t love a good cliffhanger — especially one with a (relatively) happy ending? After considerable nail-biting and handwringing, on January 1 Congress passed the American Taxpayer Relief Act of 2012 (the “Act”), extending much of the estate, gift, and generation-skipping transfer (GST) tax law developed over the past 12 years and preserving favorable opportunities for individuals and families planning the transfer of their wealth.
Key Provisions of the Act: Estate, Gift and GST Taxes -
• The maximum exemption from federal estate, gift, and GST taxes on December 31, 2012 was $5,120,000 per donor/decedent ($10,240,000 per married couple). As of January 1, 2013, those exemptions increased for inflation (the new exemption amount is anticipated to be $5,270,000, pending official confirmation from the IRS) per donor/decedent and will continue to increase annually.
• On December 31, 2012, the estate, gift, and GST tax rate applicable to nonexempt transfers was 35%. As of January 1, 2013, those rates increased to 40%.
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Topics: American Taxpayer Relief Act, Business Taxes, Estate Tax, Fiscal Cliff, Generation-Skipping Transfer, Gift-Tax Exemption, Portability
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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