Read Andy’s article published by Advisor One discussing “Why You Still Shouldn’t Gamble on Gift and Estate Taxes”.
After reading many tax articles lately in various publications and even just listening to non-tax experts like my next-door neighbor, I’ve found that not only do many people believe that timing the stock market is pinpoint achievable, they also view that extreme gambling with the ever-changing tax code is never risky. For example, a hot topic in many tax articles these days is gift taxes, relative to the inheritance tax, or estate tax, sunset coming near the end of this year. As of January 1, 2013 the tax laws sunset to 2001 levels if not extended by Congress. This will result in the inheritance tax exclusion dropping back from $5 million per person to $1 million, with the tax rate increasing from 35% to a 55% top bracket. That said, the gift tax exclusion, which allows individuals to give away assets in 2012 up to those exclusions mentioned above with a 35% rate, could actually look beneficial if the law does sunset in 2013 to a 55% rate. However, the issue I have with most advice given on this subject is that it’s a “no brainer” and that every client should give away all their assets in 2012. Rather, there should be a comprehensive outlook advising clients on a far more complicated matter than just a 35% tax rate versus the 55% tax rate possibility in 2013…..
To read more, click HERE