Fiscal Cliff and Appraising

It is about 2:00 pm on Saturday afternoon, and little has yet to happen on the fiscal cliff and there is little that we know in how the tax code may change and how that would impact appraisers.  As of 12:51, Politico was reporting "Negotiations to resolve the fiscal cliff crisis continued Saturday, but there are no signs yet of a breakthrough, say sources close to the talks."

The two major areas which are of interest to appraisers are estate tax exclusions and rates as well as charitable donation deduction allowances.

For estate taxes, if nothing is done, the exemption will revert back to $1 million and the rate will increase to 55%.  This is from the current $5 million exclusion and a rate of 35%.  There is talk of the exclusion being set at around $3.5 million and a rate of 35% but that is pure speculation at this time.  As for charitable donations, the fear is if the tax credits and percentages are reduced, there may be less incentive to donate.  That scenario is still being debated, and perhaps the only way to know for sure is to alter rates.

As of this moment there is only uncertainty about what might happen.  As news developed I will post on the direction the tax code is headed.