Because of the annual gift exclusion, a person can give up to $13,000 to anyone he or she wishes without any tax consequences. The gift exclusion for 2011 and 2012 remains at $13,000 -- the same as prior years.
The rules affecting estate taxes have been radically changing in recent years. In 2009, the maximum gift tax was 45%, though the first $3.5 million of an estate was not subject to the tax. The estate tax expired in 2010, and thus did not apply for those who died in 2010. The 2010 Tax Relief Act brought back the estate tax, but increased the exclusion and lowered the maximum tax rate. The maximum estate tax rate for 2011 was 35%, but the first $5,000,000 of an estate could be excluded from the calculation. The IRS increased the exclusion for 2012 to $5,120,000. Because the taxation of estates can be complicated, contact us to help plan for the future or address your specific situation.
Gift and Estate Taxes
2009
2010
2011
Annual Gift Exclusion
$13,000
$13,000
$13,000
Lifetime Gift Tax Exclusion
$1,000,000
$1,000,000
$1,000,000
Estate Tax Exclusion
$0
$5,000,000
$5,120,000
To ensure compliance with Treasury Circular 230, we are required to inform you that any advice concerning U.S. federal tax issues contained on this website is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code and was not written to support the promotion or marketing of any transaction or matter discussed herein. Application of tax regulations is specific to the individual or business and we recommend that you consult a qualified Komisar Brady tax professional for how the above information may apply to you.
