As you probably know by now, as a result of end of 2010 political dealings: for the next two years, the Estate, Gift and Generation Skipping taxes are unified and you individually, can gift five million dollars in assets without tax penalty. This is a limited time opportunity that expires Dec. 31, 2012. On January 13, 2013, the estate and the gift amount will revert to one million dollars.

The 2010 tax law reinstated set the rate for the generation skipping transfer tax, estate and gift tax for 2011 and 2012 at 35% for amounts over five million dollars. This is the lowest rate of taxation in the last thirty years. The rate will increase to fifty five percent in 2013, unless the law changes again.

Since the lower tax-free amounts and the higher rates may return in 2013, now would be the time for you to act in making gifts and transferring assets, that you are willing to part with because it will give you the following advantages:

1. Ability to take advantage of the high gift tax exemption amount while it is available.

2. Ability to get not only the amount of the gift out of the donor's estate but also the appreciation on the property that is given between the date of the gift and the date of the donor's death.

3.  Gifts may be made outright or in trust.

4. Gifts of undivided interests and real property or limited partnership interests, may be given.

However, please be aware, that you should not just gift for "Tax purposes" and only gift an asset or dollar/value amount that will not impede your lifestyle, and additionally, the gift must be "real", you cannot maintain control of the property gifted and the gift must be irrevocable.

Once, the gift is made, a gift tax return must be filed and some or all of the donor's lifetime gift tax exemption will be used. Lastly, appraisals on the gifted property should be done, which would allow you to "gift" away more after certain discounts are factored in that are still allowed under current law.

If you want to contemplate gifting, please feel free to contact my office for assistance at 954-981-6533