The Fiscal Cliff
I am spending several days this week speaking at the IFA Crop College being held in Logan, Payson and Vernal, Utah. As part of that presentation I am discussing the impending “fiscal cliff” and how it impacts the “estate” or “death” tax. On January 1, 2013, the estate tax exemption is scheduled to be reduced from $5.12 million to $1 million per person. The following table shows the difference in taxation of a $5.12 million gift made this year as opposed to making the same gift at death in 2013. This is big! If your net worth is greater than $2 million you should be very concerned about this impending change. If you have not done so already, you should immediately start the process of determining whether gifting this year can improve your potential tax situation.
|Example||2012||2013 (under current law)|
|Unified credit||($1,730,800)||($345,800) (Shelters $1M)|
|Tax owed||$0||$2,110.450 Tax on John’s estate|