The New Five Million Dollar Estate Tax Exemption Limit in Effect for the Next 2 Years
On December 17, 2010 Congress and President Obama reached a deal on the extension of the Bush era tax cuts. The "2010 Tax Relief Act" changed the estate tax and gift tax for the next two years. For anyone dying in 2011 or 2012, the estate tax exemption amount has increased dramatically to $5 million.
Also starting in 2011, the gift tax is unified with the estate tax. This means that the $5 million estate tax exemption will also be available for gifts made during life. Families who have a desire to gift to their children, grandchildren or other loved ones during their lives now have much more powerful gifting options available than in previous years.
The issue remains of how much longer after 2012 the $5 million extension will last. Don't expect an answer to that question until after the 2012 elections, as this topic is highly political.
If you have concerns about your estate tax planning, please set up an appointment to meet with me to review your specific situation and how it fits into the 2010 Tax Relief Act.
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