On January 1, 2013, the Senate and the House of Representatives passed the American Taxpayer Relief Act of 2012 (ATRA), averting the so-called “fiscal cliff.” The legislation, which was signed by President Obama on January 2, 2013, includes several major changes to the Internal Revenue Code. Following is an overview of those aspects of ATRA that are expected to be most relevant to clients of our Trusts, Estates and Non-Profit Organizations group. Of greatest significance, ATRA finally made permanent (subject to any future legislative changes) taxpayer-favorable wealth transfer tax exemptions that had applied temporarily in recent years, accompanied by a relatively modest tax rate increase for transfers that exceed the exemption.
ESTATE, GIFT AND GENERATION-SKIPPING TRANSFER TAX PROVISIONS -
Continues Same (High) Exemption Amount; Increased Maximum Tax Rate. ATRA provides that the estate, gift and generation-skipping transfer (GST) tax applicable exclusion amount—often referred to as an “exemption” amount—are unified at $5 million, indexed for inflation after 2011, with a maximum increased tax rate of 40%. (The maximum tax rate for was 35% in 2011 and 2012.)
Please see full alert below for more information.
Firefox recommends the PDF Plugin for Mac OS X for viewing PDF documents in your browser.
We can also show you Legal Updates using the Google Viewer; however, you will need to be logged into Google Docs to view them.
Please choose one of the above to proceed!
LOADING PDF: If there are any problems, click here to download the file.
Topics: American Taxpayer Relief Act, Charitable Donations, Estate Tax, Exemptions, Fiscal Cliff, Generation-Skipping Transfer, Gift-Tax Exemption, Income Taxes, IRS, Tax Exemptions, Transfer Taxes
Published In: Tax Updates, Wills, Trusts, & Estate Planning Updates
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.
© Morrison & Foerster LLP | Attorney Advertising