Gifting and Other Tax Planning Opportunities in 2011

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As many of you already are aware, on December 17, 2010, Congress passed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the "Act"). The Act provides for the following:

- For 2011, there is an estate, gift and generation-skipping transfer ("GST") tax exemption of $5 million per person and $10 million per couple, which increases on January 1, 2012 to $5.12 million per person and $10.24 million per couple for calendar year 2012.

- The top tax rate of 35% for estate, gift and GST taxes will continue through December 31, 2012.

- The gift tax annual exclusion for 2011 and 2012 is $13,000 per donee per year from each (single or married) individual or $26,000 per donee per year from a married individual (if the non-gifting spouse consents to gift-splitting).

- The executor of the estate of an individual who passes away in 2011 or 2012 has the ability to transfer any unused estate tax exemption to the surviving spouse, which is referred to as "portability". This allows the surviving spouse to make larger gifts and there is no "wasting" of a deceased spouse’s unused estate and gift tax exemption. There is no portability of the GST tax exemption.

- If Congress does not extend the Act, on January 1, 2013, the estate and gift tax exemptions will automatically be reduced to $1 million per person and $2 million per couple and the GST tax exemption will automatically be reduced to $1.4 million per person and $2.8 million per couple.

Please see full article below for more information.

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