2010 Tax Relief Act Alters Estate and Gift Taxes: New Portability Feature

Another change to the tax code enacted by the 2010 Tax Relief Act provides exemption portability. Under the new rules, any exemption that remains unused by a spouse who dies after Dec. 31, 2010 and before Jan. 1, 2013 is available for use by the surviving spouse in addition to his or her own $5 million exemption for taxable transfers made during life or at death. Prior to this change, the exemption of the first spouse to die would be lost if not used. However, the transferred exemption may be lost if the surviving spouse remarries and is again widowed.

We would be happy to answer any questions you may have regarding the 2010 Tax Relief Act, or about tax planning in general.

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