Leaving Money on the Table for the IRS

Anyone with more than $2.0 million of assets who is not using the $5.12 million federal gift exemption this year is missing an unprecedented estate tax savings opportunity.  This leaves money on the table for the IRS (lots of it in the form ultimately of estate tax dollars).

This post centers on my November 2012 newsletter about this year’s generous $5.12 million federal gift exemption before it decreases to $1.0 million beginning in 2013.

More specifically it is about two spousal gift options for clients who understandably do not wish to make a large gift this year to their children in order merely to use this $5.12 million exemption.  Click here for my newsletter.

The potential tax savings translates ultimately to estate tax savings and can be effectively doubled by combining the gift with the $5.12 million generation-skipping transfer (GST) exemption (this GST exemption also drops in 2013)

For example, a $5.0 milliion gift this year with use of the $5.0 million GST exemption can save $5.5 million or more of estate tax, when viewed from the collective estate tax savings for the donor and his or her next generation.  This is important and substantial tax planning.

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