A few days ago I posted on some of the new tax laws that were recently passed. Fellow appraiser Xiliary Twil from Art Asset Management Group, Inc. sent me a good link from a Wealth Management post by Richard Behrendt which adds a deeper understanding to the estate tax law. Main points are the exemption of $5.25 million adjusted for inflation, portability, and unification which is using the exemption to make lifetime tax free gifts.
Wealth Management reports
Source: Wealth Management
ATRA-2012 generally extends current estate and gift tax policy, centered around a $5.12 million unified exemption amount, which will be further increased for inflation to $5.25 million (or twice that amount for married couples) for 2013. The generation-skipping transfer tax exemption is also extended at the inflation-indexed amount of $5.25 million. The single modification ATRA-2012 makes to these rules is an increase in the top tax rate on transfers above the exemption amount from 35 percent to a new maximum tax rate of 40 percent.
These changes are quite dramatic considering that the exemption amount would have reverted to $1 million, and the top estate tax rate would have ballooned to 55 percent if Congress hadn't acted to avoid the fiscal cliff. “How Things Have Changed,” below summarizes how the exemption amount and tax rate have changed since 2000.
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