Gift Cap Raised in 2010

Summary

The tax bill passed in December pushed up the gift-tax exemption from $1 million to $5 million and reunified the gift and federal estate tax exemptions.

 

Article

The tax bill passed in December pushed up the gift-tax exemption from $1 million to $5 million and reunified the gift and federal estate tax exemptions.

The bill also reinstated the generation skipping tax (GST), but the tax rate remains zero. As a result of reunification, assets passed on through any combination of gifts through an estate or via the GST are not subject to tax until they pass the $5 million mark. Families would be wise to take advantage of the higher exemption, especially if the parents can expect to live for another two or three decades.

It may be safer to distribute assets through irrevocable and other trusts. Please call for a more detailed description.

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