“ATRA” Aftermath

Since2001, the transfer-tax rates and exemption amounts have been ambiguous. To helpaddress many of these uncertainties the American Taxpayer Relief Act of 2012was passed in 2013.  Anne Brown, an Associate Editor of Wealth Strategies,highlighted a few implications of the act, one of which was “[t]he new3.8% tax on net investment income introduced under the Act is imposed on thelesser of an estate’s or trust’s undistributed net investment income for thetax year or the excess of the adjusted gross income over the dollar amount atwhich the highest tax bracket for estates and trust.” 

Despite all the new tax and estate planning developments as a result of theAct, the Act affects only already existing provisions. One of the areas affected by the Act are Family Limited Partnershipsand whether gifts of interest in the partnership qualify forthe gift tax exclusion. Some Family Limited Partnerships claiming gifts of interest in the partnership do not qualify for the gift tax exclusion have been successful making their arguments in court.

See Anne E. Brown Estate Planning Developments, Wealth Strategies, Sep. 20, 2013.

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