Gift Tax Exemption Update
To Our Clients and Friends,
Last December’s increase in the lifetime gift and generation skipping exemption from $1 million to $5 million represented one of the most significant estate planning opportunities in many years. The current $5 million exemption ($10 million for married couples who elect to split gifts) and 35% tax rate is scheduled to revert to $1 million (or $2 million for married couples who elect to split gifts) and a 55% rate on January 1, 2013.
The Joint Select Committee on Deficit Reduction (the “Super Committee”) is reviewing numerous proposals for deficit reduction and revenue-raising, including a proposal to return the gift tax exemption to $1 million one year earlier than scheduled, on January 1, 2012. In fact, some commentators have warned that this change could be effective as soon as the November 23, 2011 date on which the Committee is scheduled to announce its proposals. In light of this uncertainty, clients may wish to consider making use of their gift tax exemptions in the next few weeks. Many estate planning techniques are available to take advantage of the current exemptions, including some that may be affected by changing tax laws. For more information, please contact a Frank, Rimerman + Co. LLP tax professional.
Any tax advice in this communication is not intended or written by Frank, Rimerman + Co. LLP to be used, and cannot be used, by a client or any other person or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing, or recommending to another party any matters addressed herein. With this communication, Frank, Rimerman + Co. LLP is not rendering any specific advice to the reader.