FEDERAL TAX UPDATE
As has been widely reported, on January 2, President Barack
Obama signed the American Taxpayer Relief Act of 2012. The act
avoids the significant tax increases that would have gone into
effect as of January 1 for most taxpayers as a result of the
expiration of a variety of tax reductions enacted in 2001 and 2003.
The following summarizes some of the provisions of the new law.
ESTATE, GIFT AND GENERATION-SKIPPING TRANSFER TAXES
The top rate for estate, gift and generation-skipping transfer
taxes is increased from 35% to 40%. The exemption for all three
taxes continues to be $5,000,000 adjusted for inflation. The actual
exemption for 2013 is projected to be $5,250,000, an increase from
the $5,120,000 exemption in effect for 2012.
