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Estate Gifting Tax Opportunity: Act Now!


Do you have investments, real estate, or other valuables in your estate that you wish to gift to another party? There is a time-sensGift Tax 2012 vs 2013itive, tax beneficial  estate gifting opportunity at hand. To take advantage of it, you must act now in order to have sufficient time to satisfy legal documentation, appraisals or valuations that may be required by the IRS with these types of gifts.


Berntson Porter can facilitate, on your behalf, the interaction of CPA, appraiser, valuator, and attorney (if those professional advisors are required for your particular gift).  


Help us help you. Call your Berntson Porter tax partner, or Gary Holcomb, today (main office 425-454-7990) so that we can make sure you gift according to the IRS guidelines and receive your tax savings.


From a tax standpoint, this is as good a time to make gifts as you may see for years. From now until the end of 2012 the federal gift and estate tax exemption is $5,120,000. The law as it currently exists will change the exemption to $1,000,000 on January 1, 2013.


No one is certain if the law will increase the exemption amount for 2013, though it is unlikely. But we are sure the 2012 exemption amount is the highest in recent history with the lowest tax rates. So right now may be the best time to make those gifts and take advantage of the increased amount that can pass gift tax free.


With gifts in general it is important for residents of Washington State to remember that Washington has an estate tax but no gift tax. To the extent you make gifts during your life, it reduces the Washington taxable estate and thereby reduces the Washington estate tax you may have to pay.


The 2012 time-sensitive planning opportunities are all about tax minimization, and the potential tax savings can be substantial. For example, a combined gift by a husband and wife valued at $10 million could be transferred at no federal gift tax cost in 2012, but would trigger federal gift tax of over $4,000,000 if the gift were made in 2013 under existing law.


So is time running out to make a gift? No one can say categorically. What can be said is that the gift tax exemption is as high as it has ever been. The gift and estate tax rate is as low as it has ever been. And gifts reduce the taxable estate for Washington State estate tax purposes. If you are looking at tax reasons for making that gift - then now is a great time.


Contact Gary Holcomb, Berntson Porter estate gifts expert and Director of Fiduciary Services, at or 425-289-7636.

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