Estate Planning


2011 2012
Annual gift exclusion: $13,000 $13,000
Estate tax applicable exclusion amount: $5,000,000 + DSUEA1 $5,120,000 + DSUEA1
Gift tax applicable exclusion amount:
Noncitizen spouse annual gift exclusion: $136,000 $139,000
Generation-skipping transfer (GST) tax exemption: $5,000,0002 $5,120,0002
Special use valuation limit (qualified real property in decedent’s gross estate): $1,020,000 $1,040,000

1 Basic exclusion amount plus deceased spousal unused exclusion amount (exclusion is portable for 2011 and 2012)

2 The GST tax exemption is not portable

2011 through 2012 gift and estate tax rate schedule

Taxable Estate Tentative Tax Equals Plus Of Amount Over
0 – $10,000 $0 18% $0
$10,000 – $20,000 $1,800 20% $10,000
$20,000 – $40,000 $3,800 22% $20,000
$40,000 – $60,000 $8,200 24% $40,000
$60,000 – $80,000 $13,000 26% $60,000
$80,000 – $100,000 $18,200 28% $80,000
$100,000 – $150,000 $23,800 30% $100,000
$150,000 – $250,000 $38,800 32% $150,000
$250,000 – $500,000 $70,800 34% $250,000
$500,000+ $155,800 35% $500,000
Credit shelter amount $5,000,000 in 2011, $5,120,000 in 2012 Credit amount $1,730,800 in 2011, $1,772,800 in 2012

Under the sunset provision of The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, the gift and estate and GST tax exemptions referenced above will revert to $1 million in 2013, and the maximum tax rate will revert to 55%.

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