Shuffling though Tax Debates - One Exemption Already Set To Increase
Darren Carlson has shuffled through hundreds of pages of articles and opinions on the potential changes to the federal estate and gift tax laws for 2013 and beyond. Most of it is guesswork. The reality is we know very little about what might happen with these taxes moving forward.
One bright spot was officially announced - the annual gift tax exclusion amount, which is adjusted annually, will be increased from $13,000 to $14,000 for 2013. This means taxpayers can make gifts of up to $14,000 per person in 2013 without any federal gift tax liability. You can gift $14,000 to any individual in 2013 (and yes, that includes your beloved attorney) without owing any federal gift tax. Feel free to read all 19 pages yourself of Rev. Bulletin 2012-45 published Nov. 5 here.
As of today, on Jan. 1 federal estate and other gift tax laws will revert to the exemption amounts and rates from 2001. That means that the federal estate tax exemption amount will be reduced to only $1 million (as opposed to the current $5.0 million exemption). The federal estate tax maximum rate will hit 55%. Where does Congress go from here? Stay tuned for the latest from our estate planning lawyers.