In the first hours of 2013, Congress approved the American Taxpayer Relief Act of 2012 (ATRA), which establishes the first “permanent” set of estate, gift and generation-skipping transfer (GST) tax provisions in twelve years. Many of the Bush estate tax reductions were made permanent, with the exception of the tax rate. In fact, the only difference between ATRA and the 2012 estate tax law is the increased tax rate of 40 percent, up from the 35 percent tax rate for the years 2010 through 2012. The estate, gift and GST tax exemptions remain at $5,000,000, adjusted for inflation since 2011, which brings the exemptions to $5,250,000 for 2013. In addition, ATRA makes spousal portability permanent, meaning that a surviving spouse will continue to be able to add the unused portion of a deceased spouse’s federal estate tax exemption to his or her own exemption.
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