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$5,000,000 GIFT EXEMPTION:
A LIMITED OPPORTUNITY?
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You may recall that in December 2010 Congress increased the gift tax exemption amount from $1,000,000 to $5,000,000 for 2011 and 2012. Because this amount is indexed for inflation, the 2012 gift tax amount will actually be $5,120,000. However, if Congress takes no further action between now and the end of 2012, the gift tax exemption amount will return to $1,000,000 on January 1, 2013.
Although some individuals have taken advantage of the $5,000,000 exemption by making significant gifts this year, for a multitude of reasons others may be waiting until next year to do so. If you are one of these individuals, you may wish to act sooner rather than later.
There is rampant speculation that Congress may act this year to reduce the gift tax exemption from $5,000,000 back to $1,000,000, effective as of January 1, 2012, or possibly as early as November 23, 2011. Although we cannot substantiate this speculation, given the uncertainty of the political climate, it may be best to utilize your $5,000,000 gift tax exemption by the end of the year or, perhaps, as soon as possible. Please note, Congress has made no official announcement as of yet; however, we wanted to make you aware of the scuttlebutt.
We would be happy to discuss these issues with you in further detail and explore the pros and cons of taking advantage of the $5,000,000 gift tax exemption while it is still an option. |
