Federal Gift Tax Exemption

The next two months may provide a unique opportunity for estate planning. The federal gift tax exemption had never exceeded $1 million until 2011. Currently, every individual is entitled to a $5.12 million gift tax exemption. A federal
estate and gift tax rate of 35% is imposed on an estate exceeding $5.12
million. On January 1, 2013, the exemption will revert to $1 million unless Congress enacts new legislation. If the law reverts to a $1 million exemption, Congress is likely to act to grandfather gifts made in 2012 up to the $5.12 million
exemption amount.

Federal Gift Tax Exemption.pdf