Gifting opportunity expires at end of 2012.
Current law allows individuals an equivalent tax exemption of up to $5,120,000 to apply to estates, gifts and generation-skipping transfers. Unless Congress acts prior to December 31, 2012, that amount will revert to $1,000,000 on January 1, 2013. Further, while this year’s top tax rate is 35%, that rate will rise to 55% on January 1st.
Given these facts, there may never be a better time for you to consider gifting (including gifts of cash, real property, interests in closely held business entities, forgiveness of debt and gifts in trust). Taking advantage of this historically large gift tax exemption may save you and your family significant tax dollars. We are ready to work with you and your other trusted advisors to consider these issues and to make recommendations. Since some gifts require appraisals, you will need to allow adequate time for obtaining valuations and completing asset transfers. Now is the time to plan! Please give an attorney in our Trusts and Estates Department a call if we may be of help.