As we wind up year 2011 and consider year-end tax planning, there may be an added incentive to accelerate your long-term gift planning to the end of 2011 instead of waiting until 2012. The so-called Super Committee may be considering a reduction or even elimination of the $5 million gift tax exemption sooner than expected, which could have a serious impact on the future plans of many families.
The Budget Control Act of 2011 (the “Act”) was signed by President Obama on August 2, 2011. The Act raised the debt limit to avoid a projected August 2, 2011, default and created a bipartisan joint select committee on deficit reduction (the “Super Committee”). The Super Committee is tasked with drafting additional deficit reduction legislation in time to be voted on by Congress before year-end. The Super Committee is scheduled to present its recommendations to Congress on November 23, 2011. Congress will have to vote on the recommended plan by December 23, 2011. The vote will be an up-or-down pure majority vote in each chamber. If Congress can’t agree on the proposed bill, automatic spending cuts will be triggered under the Act.
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