The 2010 Tax Relief Act made many beneficial changes to the estate and gift tax rules. One new rule make a particularly significant change to the gift tax.
Years ago, the gift tax and the estate tax were unified, meaning they shared a single exemption and were subject to the same rates. In recent years, this has not been the case. For example, in 2010, the top gift tax rate was 35% and the exemption was $1 million. Now, for gifts made after Dec. 31, 2010, the gift tax and estate tax are reunified and an overall $5 million exemption applies.
If you have questions regarding this change to the tax rules, or about tax planning in general, please give us a call.
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