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CLIENTS SHOULD HOLD OFF MAKING TAXABLE GIFTS PENDING FURTHER CLARIFICATION
On December 2, 2010, Senator Max Baucus (D-Mont.) introduced the Middle Class Tax Cut Act of 2010 as an amendment to H.R. 4853, the Middle Class Tax Relief Act of 2010, which passed the House of Representatives on December 2, 2010. In addition to making the Bush tax cuts permanent for middle class taxpayers, the bill would re-instate the generation skipping tax effective as of the date of introduction, December 2, 2010. Sen. Baucus’ bill would also raise the gift tax rate from 35% to 45% for gifts made on or after December 2, 2010.
We do not know if Sen. Baucus’ amendment will move forward. Pending further clarification, we recommend that clients not make significant taxable gifts intended to be subject to a 35% gift tax, particularly any generation skipping gifts (i.e., gifts to grandchildren, more remote descendants, or non-family members more than 37 ½ years younger than the donor). We will keep you apprised of further developments.
Please feel free to call the attorney in our Tax Group with whom you work if you have any further questions.
This report is a publication of Loeb & Loeb LLP and is intended to provide information on recent legal developments. This report does not create or continue an attorney client relationship nor should it be construed as legal advice or an opinion on specific situations. For further information, feel free to contact us or other members of the firm. We welcome your comments and suggestions regarding this publication.
Circular 230 Disclosure: To assure compliance with Treasury Department rules governing tax practice, we inform you that any advice (including in any attachment) (1) was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty that may be imposed on the taxpayer, and (2) may not be used in connection with promoting, marketing or recommending to another person any transaction or matter addressed herein.