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Schedule Your Free ConsulationOn January 2, 2013 President Obama signed the American Taxpayer Relief Act (ATRA) into law. Many of the temporary provisions from prior tax acts were made permanent ending much confusion and speculation.
Federal Estate, Gift and GST Taxes − The estate tax, gift tax and generation skipping tax exclusion amounts are all set at $5 million and indexed for inflation after 2011. For 2013 the exemption amount is $5.25 million. The top estate, gift, and GST tax rate is increased from 35 % to 40%.
Portability − Beginning for taxpayers dying after Dec. 31, 2010 the estate tax exclusion becomes “portable” between spouses. This means that the surviving spouse’s exemption is increased by any exemption not used at the first spouse’s death. However, this is not automatic; it must elected by timely filing a 706 estate tax return.
Carryover Basis − For most capital assets transferred at the time of death the beneficiary receives a “stepped up” basis to its fair market value at the date of death.
