One of the biggest questions on the horizon for parents and grandparents who like to give away money, is what's going to happen to the IRS Gift Tax Limit in 2010. Much of the confusion centers around the fact that in 2010, for one brief shining moment, the Federal estate tax is going to disappear. While it could hypothetically stay gone, it is scheduled to reappear in 2011, barring an unlikely act of Congress.
So naturally, many are wondering if the disappearance of the estate tax will also mean a disappearance of IRS gift tax limit (properly known as the annual exclusion amount), which can result in a gift tax being levied if too much money is given to anyone besides a spouse or a non-profit.
Sadly, nothing substantial is happening to this rule. There will still be an IRS gift tax limit in 2010, and it's looking more and more like they're going to hold the IRS gift tax limit for 2010 at $13,000 per donor, per recipient.
The only real change, which is nothing to write home about, is that the top gift tax rate will drop to 35% in 2010. But that change too is likely only temporary.
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