You Might Want to Start Gifting Early – and I Don’t Mean the Holiday Variety
It’s true. The holidays do seem to come earlier every year – early decorations, early sales, early jingles, and perhaps a few early headaches. Unfortunately, the $5 million lifetime tax exemption reduction might arrive early too. At present, the $5 million exemption is available this year and next (2012) before it is scheduled to return to just $1 million in 2012. However, the President’s recent plan for ‘Economic Growth and Deficit Reduction’ announced his intention to return the exemption amount to 2009 levels, or $3.5 million. While the text of the plan does not detail the effective date of this change, the dollars to be saved are in the plan for 2013. So… if the President’s plan passes, the exemption available may be just $3.5 million as early as January 1, 2012. If you think this might get through Congress and you want to utilize the full $5 million, you might want to consider making your gift(s) before the end of 2011.