How Business Owners Can Use 2012 To Their Advantage

While the estate tax exemption is at a lofty $5.1 million, there are a couple of moves that business owners can make to take advantage of the current amount before it potentially reverts to only $1 million. You can get shares of your business out of your name by using one of the following two methods:

1. Give gifts of voting or nonvoting stock to family members: gifts you give this year that are over $13,000 will eat into your lifetime exemption – better for it to eat into the $5.1 million amount as opposed to the $1 million amount.

2. Set up a lifetime credit trust to reduce your taxable estate: You can set this up to provide benefits for your spouse and children. Again, you will have to tap into your lifetime gift tax exemption, but there is currently more to tap into.

See Michael Foltz, Top Tax Move for 2012: Drop Dead, Inc.com, Feb. 23, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.