The threshold amount for federal estate and gift taxes is scheduled to change beginning January 1, 2013. Unless Congress enacts further legislation the federal estate and gift tax exemption amount will be reduced to $1,000,000 per person ($2,000,000 for a married couple) from the current 2012 level of $5,120,000 per person ($10,240,000 for a married couple). The maximum tax rate is currently 35%, but will increase to 55%.
These significant changes result in people being able to gift less and being taxed more beginning in 2013. With the end of the year quickly approaching and the changes that are now scheduled occur with regard to federal gift and estate taxes, it is important to investigate available options that will take advantage of existing tax laws and then take appropriate action before the end of the year.
For assistance with the above or other estate planning needs, contact attorney Shannon S. Frank, or a member of the firm’s Estate Planning & Probate Administration practice team.
IRS Circular 230 Disclosure. To ensure compliance with U.S. Treasury Regulations governing tax practice, we inform you that any tax advice contained in the foregoing material was not written or intended to be relied upon, nor can it be used, by any taxpayer for the purpose of (i) avoiding tax penalties or (ii) promoting, marketing or recommending to another person any tax-related matter or transaction.