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What are the estate tax limits after 2012?
Old 12-28-2011, 09:05 AM   #1
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What are the estate tax limits after 2012?

Looking around the internet I see that the estate tax limit for 2012 is about 5M dollars. But things are not clear after 2012. Even the IRS web site seems unclear (maybe I missed something). Are future rates unknown at this time? Is Congress now setting the limit annually?

At 5M dollars the limit doesn't affect me but over the past few years the rate has varied from 1M, to 3M, to 5M dollars. In 2010 there was no limit at all (I believe). How do people plan their estates with the numbers jumping around like this?

Again my main question is, what are the estate tax limits for years after 2012?

thanks!
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Old 12-28-2011, 09:36 AM   #2
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Unless Congress changes something the estate tax exemption drops from about $5.13m in 2012 to $1m in 2013 and the tax rate increases from 35% to 55% on any amount over the exemption. My guess is that we end up somewhere between $5m and $1m with a tax closer to 35% than 55%.

Subsequent years would be likely indexed for inflation.
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Old 12-28-2011, 09:51 AM   #3
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Quote:
Originally Posted by km4hr View Post
Again my main question is, what are the estate tax limits for years after 2012?
No one knows because, well, Congress keeps kicking the can down the road and adopting short-term legislative patches to prevent it from reverting to $1M (which almost all on both sides think is too low, especially where family farms and small businesses are concerned).

If these guys could ever put their differences aside and come up with a reasonable compromise number, the usual range I hear is in the $3-5M range.
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Old 12-29-2011, 10:34 AM   #4
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Yeah, I don't understand why they can't just settle on a $5 million exemption, indexed for inflation, with a rate at the highest marginal income tax rate (currently 35%). Or something slightly different. None of the numbers are magic, but they all make more sense than leaving this ridiculous reverting to $1M/55% on the books.

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No one knows because, well, Congress keeps kicking the can down the road and adopting short-term legislative patches to prevent it from reverting to $1M (which almost all on both sides think is too low, especially where family farms and small businesses are concerned).

If these guys could ever put their differences aside and come up with a reasonable compromise number, the usual range I hear is in the $3-5M range.
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