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Gift Tax Annual Exclusions and Special Considerations |
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Each individual donor may give
any number of recipient donees
a tax free gift of $13,000.00
per year which is not a future
interest. Each year a couple
may double this amount for each
donee. To give away more than
the exclusion each year is to
reduce your Lifetime Estate
Tax Exemption by that amount. The Life Time Gift Tax Exemption is $5,000,000.00 for the years 2011 and 2012 with a thirty-five (35%), thereafter tax.
In 2013, if action is not taken by the current Administration, the exemption will revert to $1,000,000.00 with a fifty-five (55%) tax thereafter.
Generally, the surviving spouse
inherits from the decedent spouse
free from Estate Taxes.
Assets passing because of death receive
a new stepped up basis for capital
gains purposes. Furthermore, for all
community property the surviving spouse's
half interest also receives a new
stepped up basis. In other words,
for community property the entire
asset is given a new stepped up basis
for capital gains treatment. If it
is then liquidated for the new value, there would be
no Capital Gain income and therefore
no Capital Gain Income Tax due.
A surviving spouse will inherit all
estate assets tax free. An individual
estate below the exemption amount
shall pass to any heir tax free. With
proper estate planning a couple would
be able to shelter twice the exemption
amount, set up a gift giving strategy
while they are living, and take full
advantage of a projected new basis
on all community property to shelter
their estate from Estate Taxes and
possibly, future Income Taxes as well.
Shelter your estate from taxes wherever
possible. With proper planning you
may be able to shelter your entire
estate from Estate Taxes or, at least,
take full advantage of the Life Time
Estate Tax Exemption, the Annual Gift
Exclusions and all other possible
deductions and considerations, such as passing on the current property tax assesment to a child, therefore qualifying for the exemption and the reassesment, such as passing on the current property tax assement to a child, thereby qualifying for the claim for exemption from reassesment.
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