01/02/2012 07:49:00 AM EST
Gifting in 2012
David R. Schoenhaar, Esq.*
2011 is coming
to a close and the generous tax laws that went into effect on January 1, 2011
reunifying the estate, gift and GST exemption amounts to $5,000,000 are creating
renewed interests in lifetime gifting.
As discussed in
a previous Blog, the sweeping legislation increased the gift tax exemption
amount by $4,000,000 (from the previous exemption amount of $1,000,000),
significantly expanding one's ability to make lifetime transfers without
incurring a gift tax. An overlooked
provision of the new law is that the exemption amounts are subject to
adjustments for inflation for those years beyond 2011. This is good news for those able to make
significant gifts in 2012 as the gift tax exemption amount increases an
additional $120,000 to $5,120,000 starting January 1, 2012. Now a couple can transfer a total of
$10,240,000 during their lifetime free of gift tax. The inflation factor also applies to the
estate tax exemption amount but does not apply to the gift tax annual exclusion
amount which continues to be $13,000 (or $26,000 if spouses elect to split
planners should inform their clients of the additional gift tax exemption
amount for 2012 as new gifting opportunities may be available.
*David R. Schoenhaar, Esq., is an associate at Ruskin
Moscou Faltischek, P.C. and is a member of the firm's Trust and Estates
Planning and Litigation Department.
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