As you may already have learned, in the first two days of 2013, Congress passed a tax compromise that averts the “fiscal cliff” and makes permanent the federal estate tax with an exemption of $5.12 million per individual and a tax rate of 40% for amounts over the exemption. But this news bite might leave you hungry for details about the estate tax, such as portability of the exemption, and the other wealth transfer taxes–the gift tax and the generation-skipping transfer tax. This post aims to answer your questions and serve as a useful resource.
H.R. 8 – Background
The agreement that Congress reached is H.R.8, American Taxpayer Relief Act of 2012. On July 24, 2012, Rep. Dave Camp [R-MI-4] introduced a different version of this bill. Although the House passed the earlier version of H.R. 8 on August 8, 2012 in a 256-171 vote (see Roll no. 545), “the Senate technically gutted and substituted in the language of the their tax act,” explains Kevin Staker, an estate planning attorney. “They had to do it this way because revenue acts technically have to start in the House.”
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H.R. 8 – Background
The agreement that Congress reached is H.R.8, American Taxpayer Relief Act of 2012. On July 24, 2012, Rep. Dave Camp [R-MI-4] introduced a different version of this bill. Although the House passed the earlier version of H.R. 8 on August 8, 2012 in a 256-171 vote (see Roll no. 545), “the Senate technically gutted and substituted in the language of the their tax act,” explains Kevin Staker, an estate planning attorney. “They had to do it this way because revenue acts technically have to start in the House.”
Read More