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Colorado | http://www.bloomberg.com/news/2010-12-14/estate-measure-creates-win...
Estate Measure Creates Window to Give Children Up To $10 Million Tax-Free
By Margaret Collins - Dec 14, 2010 Families would be able to make tax- free gifts to their children or others of as much as $10 million, an increase from the current limit of $2 million, under the tax-cut bill Congress is debating this week.
Beginning in 2011, an individual U.S. taxpayer’s lifetime gift-tax exclusion will jump to $5 million, up from $1 million currently, according to the legislation. Gifts from living parents allow taxpayers to transfer assets such as cash, stocks or shares of a business to their kids and let the value grow outside of the couple’s estate, said Jim Cundiff, an estate planning attorney with McDermott Will & Emery, who’s based in Chicago. Unifying the estate and gift tax exemptions is one of the biggest benefits in the measure, he said.
“You could transfer $10 million next year without paying any tax,” Cundiff said. “That’s a big tax-free gift. This benefit evaporates in two years, so take it while you can.” Parents may use trusts to give the money to descendants if they’re concerned about giving a lot of money directly to their children, he said.
Senate leaders released an agreement on Dec. 9 crafted by President Barack Obama and Republicans to keep existing tax rates through 2012 that also included the changes to estate and gift taxes. The bill, which is scheduled for a vote this week, sets a $5 million threshold for an individual or $10 million for a couple for both estate and gift-tax levies, with a top tax rate of 35 percent. The provisions would expire at the end of 2012, according to the legislation.
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FYI Tax free farm transfer to your children
