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Key estate and gift tax changes were made in June, 2001. What were those changes?
The Economic Growth and Tax Relief Reconciliation Act of 2001 made significant revisions to the Estate and Gift Tax law. The major highlight is the increase in the estate tax increase to $3.5 million by 2009, the repeal of the estate tax exemption for one year, and its reinstatement in its 2001 form in 2011. The exemption amounts phase in is as follows:
Year Exempt Amount Exempt
2001 ........ $675,000
2002, 2003 ...... $1,000,000
2004, 2005 ..... $1,500,000
2006--2008 ..... $2,000,000
2009 .......... $3,500,000
2010 ..... No estate tax
2011 .......... $1,000,000 (unless Congress extends repeal)
These individual amounts are doubled for married couples with a bypass trust.
The gift tax is not repealed. However, the gift tax exemption amount for lifetime gifts is fixed at $1 million in 2002, and beginning in 2010, the maximum gift tax will be 35 percent – the top individual income tax rate. The law left untouched the $12,000 per year exclusion you can give to anyone without owing gift tax. |
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