CFP
Gifting - Tax Liability
Tax Liability
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 cancelled the scheduled 2010 repeal of the federal estate tax, and adopted tax rates that are lower than those that were in effect in 2009 and before. The maximum rate is now 35% and $5,000,000 of transfers are exempt from tax. In addition, any portion of the $5,000,000 exemption unused by the estate of a first-to-die spouse may be used as an additional exempt amount by the surviving spouse for both gift and estate tax purposes if a proper election is made.
The rates discussed in this section are scheduled to expire after 2012, at which time significantly higher rates are scheduled to apply.
The donor is responsible for paying the gift tax. If a trust or estate makes the gift, the individual beneficiaries are considered the donors. If the donor does not pay, the recipient has to pay the tax.
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 cancelled the scheduled 2010 repeal of the federal estate tax, and adopted tax rates that are lower than those that were in effect in 2009 and before. The maximum rate is now 35% and $5,000,000 of transfers are exempt from tax. In addition, any portion of the $5,000,000 exemption unused by the estate of a first-to-die spouse may be used as an additional exempt amount by the surviving spouse for both gift and estate tax purposes if a proper election is made.
The rates discussed in this section are scheduled to expire after 2012, at which time significantly higher rates are scheduled to apply.
The donor is responsible for paying the gift tax. If a trust or estate makes the gift, the individual beneficiaries are considered the donors. If the donor does not pay, the recipient has to pay the tax.
|
Taxable Gift or Estate Tax |
Tentative Tax |
||
|
From |
To |
Tax |
Rate on Excess |
|
$0 |
$10,000 |
$0 |
18% |
|
10,000 |
20,000 |
1,800 |
20% |
|
20,000 |
40,000 |
3,800 |
22% |
|
40,000 |
60,000 |
8,200 |
24% |
|
60,000 |
80,000 |
13,000 |
26% |
|
80,000 |
100,000 |
18,200 |
28% |
|
100,000 |
150,000 |
23,800 |
30% |
|
150,000 |
250,000 |
38,800 |
32% |
|
250,000 |
500,000 |
70,800 |
34% |
|
500,000 |
….. |
155,800 |
35% |
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