WEEKEND INVESTOR --- The New Basics -- Family Value: Last-Minute Gift Traps
The rush is on to give away assets to family members before the $5.12 million gift-tax exemption reverts to $1 million at year-end.</br></br>But investors need to take care that their tax-saving strategies don't backfire.</br></br>The timing is appealing for taking advantage of what many experts consider a shrinking tax break.</br></br>Last year, the federal gift-tax exemption climbed to $5 million for individuals and $10 million for married couples filing joint tax returns, from $1 million and $2 million, respectively, while the top tax rate fell to 35% from 45%. For 2012, the inflation-indexed limits climbed to $5.12 million and $10.24 million. (Estate-tax limits were changed as well, to the same amounts.)</br></br>Congress could well tackle the issue now that the election is over, but few experts expect the gift-tax exemption will be kept at its current level.