Use Spousal Lifetime Access Trusts to Take Advantage of the Gift Tax Exemption.
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One of the most significant changes is the ability of married spouses to transfer the estate and gift tax exemption between each other.
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For the moment, Rolling Jubilee is buying medical debt on the view that the medical debt gift tax exemption applies to make forgiveness a gift (section 2503(e)(2)(B)).
Gifts beyond that trigger gift tax or eat into your lifetime gift-tax exemption.
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The large gift-tax exemption provides many planning opportunities to the wealthy.
In past years, the gift-tax exemption was often much smaller than the estate-tax exemption, which limited the early transfer of assets that were growing in value.
People who want to take advantage of this year's gift-tax exemption should beware of one giant constraint: The Internal Revenue Service will deny tax benefits to a trust if the person who sets it up retains control, either himself or through an agent.
JCX-1-11 also provides an informative table summarizing the estate and gift tax rates and exemption amounts from 1975-2011.
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This time the prevailing view was that clients should avoid the gift tax altogether by taking full advantage of the generous exemption for lifetime gifts.
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But the wealthiest Americans will have had the benefit of using the higher exemption amounts through gift and generation skipping tax planning for 2011 and 2012.
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What if the estate tax is repealed with the gift tax left in place, with who knows what lifetime exemption ?
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In addition, the estate and gift tax will remain "unified, " meaning an individual can use his or her entire exemption to make gifts while alive instead of waiting until death.
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