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Federal Gift and Estate Tax Exemption Levels

Glossary

Federal Gift and Estate Tax Exemption Levels (based on current law)

Year

Estate Tax Exemption

Generation Skipping Tax Exemption

Lifetime Gift Tax Exemption

Max Estate &
Gift Tax Rates

2009

$3.5 million

$3.5 million

$1 million

45%

2010

Estate Tax suspended

GST Tax suspended

$1 million

Rate equals top income tax rate

2011

$5 million per person
$10 million per couple

$5 million per person
$10 million per couple

$5 million per person
$10 million per couple

35%

2012*

 $5.12 million per person
$10.24 million per couple

$5.12 million per person
$10.24 million per couple

 $5.12 million per person
$10.24 million per couple

35% 

2013 

 $1 million

 $1 million

$1 million 

 55% estate tax
35% gift tax


* adjusted for inflation per 2010 legislation

Gift tax is a tax on assets passed from one individual to another during life. The amount exempted from gift tax each year is linked to the inflation rate and increases periodically to the nearest $1,000. The gift tax annual exclusion amount for gifts from one individual to another individual (not charity) in 2012 is $13,000 per person per donee. This means that you may give up to $13,000 to each of any number of individuals in 2012 without paying tax on those gifts. As an example, a couple with two children may each give $13,000 to each child, for a total of $52,000 without paying any gift tax (2 people x 2 children x $13,000 each  =  $52,000). A lifetime gift tax exemption may be used for gifts above the $13,000 annual amount.

You can learn more about estate, gift and income taxes and charitable deductions, and also read IRS Publication 950 Introduction to Gift and Estate Taxes at http://www.irs.gov/ .


This web page does not provide legal or financial advice, nor is it a comprehensive review of the topic. You should consult your legal and financial advisors and Clarkson University before making or planning your gift. (1/2012)