"Shedding Light on Unified Gift/Estate Tax"
Shedding Light on Unified Gift/Estate Tax The taxes that are imposed on transfers of assets are something to take very seriously when you are interested in wealth preservation. These taxes extend beyond the estate tax alone. There is also a gift tax, and it is unified with the estate tax under Internal Revenue Service regulations. There are those who question the fairness of the gift tax. If you were to set aside a certain percentage of your earnings after you paid income tax and payroll or self-employment tax what you are left holding is an after-tax remainder. When and if you decide to give some of this remainder to someone as a gift, why should this gift be taxed again? To go a step further, why should it be taxed again at an exorbitant rate? At the current time the gift tax rate is 35%, and next year it goes up to 55%. Whether it is fair or not, the gift tax is indeed something that you have to contend with when you are engaged in your financial planning efforts. However, you do have a bit of a cushion. Each individual can give as much as $13,000 each year to any number of people before the gift tax is applied. Furthermore, there is a lifetime unified gift/estate tax exclusion. Right now it stands at $5.12 million, but it is being reduced to $1 million in 2013. All this can be a bit confusing to the layperson, and to compound the situation changes to the tax laws are implemented regularly. The best way to be optimally positioned at all times is to develop a good on-going relationship with an experienced and savvy San Jose estate planning lawyer. Experienced estate planning attorneys Campbell CA of the Law Office of Roy W. Litherland offers estate planning and business planning resources to residents of Campbell CA. To learn more about these free resources, please visit www.attorneyoffice.com/ today.