Top Beverly Hills Tax Attorney Bruce Givner: “Radical Changes to Estate and Gift Tax Laws Could Cost Some Taxpayers Millions”

by Bruce Givner on May 11, 2012

When the clock strikes midnight on December 31, 2012, recent changes to existing federal estate and gift tax laws will expire.  “And these changes could cost some taxpayers millions,” says Top Beverly Hills Tax Attorney Bruce Givner.

In December 2010, President Obama extended the “Bush Tax Cuts” which included significant new tax savings provisions.  Exemptions for estate tax, gift tax, and generation-skipping transfer tax increased to $5 million in 2011 and $5.12 million in 2012 for individual taxpayers.

In essence, for 2012:

  • Most estates with a net value equal to or less than $5.12 million are exempt from estate tax;
  • Regardless of the size of the estate, individuals can make lifetime gifts up to $5.12 million without incurring a gift tax; and
  • Annual gifts of $13 thousand and below are exempt from gift tax.

When these provisions expire, the new exemption and rates will drop back:

  • Most estates with a net value over $1 million will be subject to estate tax; and
  • The tax rate on non-exempt generation-skipping transfers increases from 35% to 55%.

“The consequence of these changes is a taxpayer who made a large gift in 2012 may have been exempt from any tax,” continues Givner.  “That same gift in 2013 could result in a whopping gift tax liability.”

These estate and gift tax provisions have cost the federal government billions of dollars in lost revenue.  However, taxpayers with substantial estates hope the 2012-elected Congress and President enact a further extension.

Avoid making hasty end-of-the-year decisions that could negatively affect one’s tax planning.  High net worth individuals should contact Givner & Kaye.  Givner & Kaye can save you $100k-$1 million on your income tax liability.

Givner & Kaye can make the estate tax vanish.  Givner & Kaye focuses on sophisticated income tax planning and compliance, tax litigation and procedure, and asset protection plans for individuals and businesses in Beverly Hills, Calabasas, West Los Angeles, Hollywood, and other areas of Los Angeles County.  Call Givner & Kaye at (310) 207-8008 today.

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