The Federal Estate and Gift Tax Exemption is $5,000,000 per person for 2011 and 2012. After that it is scheduled to decrease to $1,000,000.

Will Congress extend the current law?  The Kiplinger Tax Letter believes that the current exemption and rates will be extended, but that it will probably be late in 2012 before we know for sure.  In the meantime, tax advisors and their clients will be in limbo. However, if clients have been considering making large gifts, do so before 2013 to remove future appreciation from the donor's estate in the event Congress does nothing.

Also remember that the annual gift tax exclusion is $13,000 per year to everyone without a reduction in the lifetime exemption.

Donees pay no gift tax irrespective of the amount of the gift during life or at the donor's death. Only donor's pay gift tax, if any.

Jerry