If you are considering making gifts in 2012 you may have a limited time to take advantage of a golden opportunity. Through December 31, 2012, each individual may make gifts up to $5,120,000 without incurring gift tax liability ($10,240,000 for a married couple).
Unless Congress takes further action, beginning January 1, 2013, the lifetime exclusion amount will return to $1,000,000 per individual ($2,000,000 for a married couple).
One of the major advantages of gifting is that appreciation in the value of the gifted property is removed from one’s estate. Furthermore, if the lifetime exclusion does revert to $1,000,000, use of the $5,120,000 gift before year-end will have removed $4,120,000 from your estate with no transfer tax cost – a unique opportunity.
Gifts can be made in many forms, including interests in real estate, and there are many vehicles that may be utilized for making gifts. For example, spouses may use Irrevocable Trusts that enable them to retain access to and control over the transferred assets.
Real estate interests that are gifted will need to be valued by a licensed real estate appraiser, preferably one who has extensive experience with appraisals that are routinely reviewed by the IRS. LandVest has over 40 years of experience valuing various types of real estate interests (ranging from the simple to the complex) and specializes in unique, complex, and high-end real estate. If you are considering gifting real estate interests we would be glad to speak with you and your advisors about how we may be able to assist you.
This blog has been presented by Nicholas R. Pratt, (npratt@landvest.com) a Project Manager in LandVest’s Real Estate Consulting Group and Gregory J. Englund, Esq. (GJEnglund@EnglundLawFirm.com) with The Law Offices of Gregory J. Englund.
This general discussion is not intended to provide tax or other legal advice to any specific person. No one should implement any of the arrangements herein described without competent professional advisors.
