| 2010 | 2011 | 2012 | 2013 | |
| Estate Tax | ||||
| Exemption amount * | $5.0 million | $5.0 million | $5,120,000 | $1.0 million |
| Tax rate | Flat (35%) | Flat (35%) | Flat (35%) | Progressive (up to 55%) |
| Elections | Can elect out of estate tax, but §1022 carryover basis will apply ($1.3 million “free-basis” + $3.0 million spousal bonus) | Can elect to add “deceased spousal unused exclusion amount” (basically, the unused exemption from the estate of the decedent s last deceased spouse or the exemption amount in effect at the decedent s death, whichever is less) to the exemption amount | Can elect to add “deceased spousal unused exclusion amount” (basically, the unused exemption from the estate of the decedent s last deceased spouse or the exemption amount in effect at the decedent s death, whichever is less) to the exemption amount | NoneNote that these estate tax laws will be very political during the 2012 Presidential election. Only time will tell what happens with the so-called Bush Tax Cuts |
| Gift Tax | ||||
| Exemption amount | $1.0 million | $5.0 million (plus, if elected, the “deceased spousal unused exclusion amount”) | $5,120,000 (plus, if elected, the “deceased spousal unused exclusion amount”) | $1.0 million |
| Tax rate | Flat (35%) | Flat (35%) | Flat (35%) | Progressive (up to 55%) |
| Generation-Skipping Transfer Tax | ||||
| Exemption amount | $5.0 million | $5.0 million | $5,120,000 | $1.0 million(indexed from 1997) |
| Tax rate | Zero | Flat (35%) | Flat (35%) | Progressive (up to 55%) |
* Note the evolution of estate tax exemption amounts: $600,000 in 1997; $625,000 in 1998; $650,000 in 1999; $675,000 in 2000-2001; $1,000,000 in 2002-2003; $1,500,000 in 2004-2005; $2,000,000 in 2006-2008; $3,500,000 in 2009.
Copyright 2011 Phillips Law Offices, A Professional Corporation