End Of Year Gift Tax Planning Just Got Harder
By: David M. Frees III
Were you planning to make gifts at the end of this year knowing, that since Congress has failed to act, the federal estate tax returns with a vengeance at 12:01 on January 1, 2011? Are you one of the families who are tired of waiting for clarification and are willing to pay a thirty five percent tax for gifts before the end of the year?
Well, while tax payers and planners alike have been complaining about the unjustness of uncertainty in the law and financial writers and taxpayers have been begging for clarification, Congress has been failing to provide any real guidance.
And now, to make matters worse, the Baccus bill, while suffering a temporary defeat just a few days ago, has raised the specter that Congress has suddenly awakened to the idea that many wealthy families are planning gifts at the end of the year and are willing to pay gift taxes at a rate of 35% to avoid higher tax rates in the future.
While the bill was defeated on a procedural basis, many are now worried that Congress is even considering a bill that would be effective retroactively to December 2, 2010 and would foil the end of year planning that has resulted from Congresses repeated failures to act.
If you’d like to know more about the status of this bill here is a great blog on the Baccus Bill and the federal estate tax by Forbes.