Tuesday, December 27, 2005

Taxes Taxes Taxes

Estate taxes. Wealthy people who care about their heirs literally don't want to get caught dead in 2005. The rewards for surviving until 2006 arrives are handsome. First, the basic exclusion from the federal estate tax jumps to $2 million from $1.5 million for 2005. Next, the top federal rate declines to 46% from 47%.

Gift tax. For the first time since 2002, the annual gift-tax exclusion will increase -- an important point for wealthy people to consider as part of their estate-planning strategy. The exclusion will rise to $12,000 for 2006 from $11,000 this year. That means you can give away as much as $12,000 next year to anyone you wish -- and to as many people you wish -- without having to report it to the Internal Revenue Service. There is no limit on the total amount you can distribute.


Rich Uncle Pennybags said...

Coleman, I seem to have misplaced my cardigan on the golf course. Oh well, I'll just buy a new one. It's great to be rich!