By Christopher Hussey, CPA
Beginning in 2011 Congress set the lifetime exemption for estate tax, gift tax, and generation skipping tax (GST) at $5 million per taxpayer. This means that a married couple can gift $10 million of assets without paying federal gift taxes or generation skipping taxes. The estate, gift tax and GST exemptions are indexed for inflation and increased to $5.12 million on January 1, 2012.
Taxpayers that maximized their exemptions in 2011 are now able to gift another $120,000 ($240,000 for a married couple) during 2012, again without paying any gift tax. Taxpayers that have not yet taken advantage of the increased exemptions are encouraged to do so. The exemptions for estate, gift, and GST are slated to revert to the old amounts of $1 million each as of January 1, 2013. Although there is much talk that the actual exemption to be enacted by Congress will be higher than that, no one can be sure what will transpire.
In addition to the lifetime exemption amounts, a taxpayer is allowed an annual exclusion of $13,000 per beneficiary. This means that a married couple could give their child $26,000, $13,000 each, without using any of their lifetime exemption.
Please contact a member of your DGC service team if you would like to discuss the gift opportunities available to you.
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