Gift and Estate Tax

The gift tax has the same $5,000,000 exemption for 2011 and 2012 as the estate tax. This is an opportunity that may not come up again for significant gift tax planning.

Also for 2011 and 2012, non-taxable estates will have to file an estate tax return to establish the amount of unused estate tax exemption going to the surviving spouse. This makes the exemption portable and can create a tax free estate of up to $10,000,000 for a husband and wife.

Estate assets passing to heirs will receive a step up in basis to fair market value at date of death effective back to January 1, 2010.