Alexandria, VA Estate Planning Blog

Wednesday, January 2, 2013

New Estate Tax Law 2013: The American Taxpayer Relief Act of 2012

House Passes H.R. 8 With a Vote of 257-167; Modifies Estate Tax, Generation Skipping Tax & Gift Tax (1/2/2012)

 

I. Makes the 2012 Estate, Gift & GSST Law Permanent (except as amended)

H.R. 8, after being signed by the President, will make the 2012 estate tax law permanent (including the existing 5 million credit that is indexed for inflation) by repealing the sunset provisions of the 2001 and 2010 Tax Acts.

Under H.R.  8, section 101(a), except as amended, Congress made permanent the sunset tax laws in the Tax Relief Reconciliation Act of 2001 and the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010.

 

II. Increases the Tax rate on Taxable Estates

The act also modifies the Tax Rates on Taxable Estates, found in 26 USC 2001, as follows:

For decedent's dying after 12/31/2012, the maximum estate tax, gift tax, & generation skipping tax rate will be 40%. The rate progressively increases as follows: 

 

"Over $500,000 but not over $750,000 . . . . . $155,800, plus 37 percent of the excess of such amount over $500,000.

Over $750,000 but not over $1,000,000 . . . . $248,300, plus 39 percent of the excess of such amount over $750,000.

Over $1,000,000 . . . . $345,800, plus 40 percent of the excess of such amount over $1,000,000.’’ 

 

Under H.R.  8, section 101(c), as identified above, Congress modified the table contained in subsection (c) of section 2001, as amended by section 302(a)(2) of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.

 

III. What's Next

The bill, having been passed by the house and senate, goes to the President for signature. 

 

The text of H.R. 8, as published by House,gov on 1/2/2012, can be viewed by clicking here.  

 




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