New York Gift-Tax Cap could Increase to as much as $10 Million under Tax Proposal

The gift-tax cap could increase to $10 million — up from the current limit of $2 million — under the tax-cut bill Congress is debating this week, Bloomberg News reported.

Those worried about estate taxes should consult an experienced probate attorney to establish a comprehensive New York estate plan. One of the reasons such planning can be so crucial is the advantages of the gift-tax exemption, which can permit you to distribute thousands of dollars to your children and other heirs tax free. Such giving not only allows you to give loved ones a larger inheritance while saving thousands in taxes, it gives you an opportunity to see the difference your money is making during your lifetime. Making a promise to tackle your estate planning as part of your New Year’s resolutions can bring the peace of mind that comes with knowing your life’s work will benefit your children, not the government tax collectors.Under the proposal, a U.S. taxpayer’s lifetime gift-tax exclusion will jump to $5 million in 2011, up from the current $1 million. Each parent could donate to a child, moving as much as $10 million in cash, stocks or portions of a family business outside a couple’s estate. The window is only slated to last for two years, so those interested should begin planning as soon as possible by speaking with a qualified attorney.

The lifetime gift-tax limit has been $1 million since 2002. In addition to the new lifetime gift-tax exclusion of $5 million, couples can continue to give up to $26,000 a year tax free to each beneficiary ($13,000 for a single person).

New York City Probate Attorney Jules Martin Haas handles all types of probate cases, including Wills, estate planning, estate settlement, advanced directives and guardianship matters. Call (212) 355-2575 for a free consultation to discuss your rights.