After reviewing the news coverage of the bill, one word jumps out at me - permanent. Can that be? Has Washington, D.C. granted me my holiday wish? Did they not kick the can another two years, but rather write and pass legislation that has solidness to it? Apparently they did. Miracles can happen dear reader!
So, if you are eager to learn more about the landscape of federal taxation, here are some highlights:
- the federal exemption levels we had used in 2012 were made permanent, and are/will be indexed for inflation;
- adjusting for inflation, the federal exemption level for 2012 is $5.12 million per person;
- the IRS has yet to release the indexed federal exemption for 2013;
- decedents with a net worth exceeding the federal exemption level will face a 40% tax (on the amount exceeding the exemption); and
- portability for surviving spouses is now permanent, allowing a spouse to preserve a first spouses exemption even after death, via an estate tax return filed within 9 months.
The ink is still wet on this piece of law, and the continuing legal education courses have yet to be held. As we move through 2013 and beyond I will continue to post on changes and updates related to the federal estate tax. Yes, some of us actually enjoying reading and thinking about these issues. The rest of you -- get out there and focus on your new years resolution. Thanks for reading, and remember - a blog is not an attorney. Please consult a licensed attorney in your state for advice specific to your situation.
M. Gustafson Gervasi, 2012 -- winter arrives in Madison, Wisconsin