2012 Tax Planning-Part 3-GIFTING TO CHILDREN

The current unified gift and estate tax exclusion of $5 million (actually $5,120,000 for 2012) will revert to $1 million in 2013 under current law. The maximum tax rate will also go from 35 percent to 55 percent. Most taxpayers would be unwilling to accelerate their deaths, but they might be willing to accelerate gifts to take advantage of the current high exclusion amounts.

Neither the Obama administration nor the Republicans are advocating a return to the $1 million exclusion. However, in an impasse, it might happen because no one can agree on how to keep it from happening

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