Chutes and Ladders Sucks!

We have all played this classic board game and we have the same problem.  We move our game pieces in the wron … http://p.ost.im/p/daQ5NU

American Taxpayer Relief Act of 2012 – Important Developments in Estate and Gift Tax

The recent lead up to the so-called “fiscal cliff” led to great speculation about what measures Congress would take to prevent large tax increases and spending cuts that had the potential to significantly damage the economy. On January 1^st, the tax side of the issue, at least, was addressed. The American Taxpayer Relief Act of 2012 has important implications for nearly every aspect of the tax code, including the estate and gift tax provisions.

Prior to Congress’ action, the estate tax was scheduled to revert to the pre-2001 maximum rate of 55%, with an exclusion amount of only $1 million (not indexed for inflation). The recent tax act makes permanent a maximum rate of 40%, with an exclusion amount of $5 million (indexed for inflation in tax year 2012 to $5.12 million). Previously, the estate tax was governed by a complex set of rules applying to those deceased between December 31, 2009 and January 1, 2011. These estates could choose to opt out of the estate tax and use a set of carry-over basis rules, or pay estate tax with a 35% tax rate and $5 million exclusion amount and a stepped-up basis. For decedents dying in tax year 2011 and 2012, the 35% rate and $5 million exclusion apply without the option to opt out.

The new tax act also makes permanent the “portability” of unused estate tax exclusion amount between spouses. This provision, previously only available to estates of decedents dying after December 31, 2010 and before January 1, 2013, will now be permanent going forward. This portability feature allows the surviving spouse to elect to use the deceased spouse’s remaining unused $5 million (indexed for inflation) exclusion on his or her own transfers during life or at death.

Taxable gifts will now be subject to a 40% maximum rate, with a lifetime combined gift/estate exclusion amount of $5 million (indexed for inflation). This is an increase from the previous top rate of 35%, which was in effect for 2011 and 2012. For next time, more discussion of the important “portability” feature and how it can be used.

Please don’t tell me that I’m talented.

I’m an oil painter as well as a graphic designer, and there’s a compliment that gets under my skin.  It usual … http://p.ost.im/p/d5963B