Dear Clients and Friends:
We provide this advisory to inform you of three planning opportunities:
The American Taxpayer Relief Act of 2012 unexpectedly sets the exemptions for estate, gift and generation-skipping tax at $5 million per person, indexes those exemptions for inflation, provides a fixed tax rate (40%) and allows portability of a deceased spouse’s exemption.
However, on April 10, the Obama administration’s 2014 budget proposal and the companion Treasury Department Greenbook propose returning estate, gift and generation-skipping tax exemptions and rates to 2009 levels (45% tax rate, a $3.5 million estate and generation-skipping tax exemption and $1 million lifetime gift tax exemption, both indexed for inflation). Absent Democratic control of the House of Representatives after the 2014 elections, Congress will not likely adopt these proposals. The White House proposal would grandfather transfers made prior to date of enactment.Read more . . .