Wednesday, September 25, 2013
Since 2001, the transfer-tax rates and exemption amounts have been ambiguous. To help address many of these uncertainties the American Taxpayer Relief Act of 2012 was passed in 2013. Anne Brown, an Associate Editor of Wealth Strategies, highlighted a few implications of the act, one of which was "[t]he new 3.8% tax on net investment income introduced under the Act is imposed on the lesser of an estate's or trust's undistributed net investment income for the tax year or the excess of the adjusted gross income over the dollar amount at which the highest tax bracket for estates and trust."
Despite all the new tax and estate planning developments as a result of the Act, the Act affects only already existing provisions. One of the areas affected by the Act are Family Limited Partnerships and whether gifts of interest in the partnership qualify for the gift tax exclusion. Some Family Limited Partnerships claiming gifts of interest in the partnership do not qualify for the gift tax exclusion have been successful making their arguments in court.
See Anne E. Brown Estate Planning Developments, Wealth Strategies, Sep. 20, 2013.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.