Gift & GST Taxes

For gifts made in 2010, the Act provides a gift tax rate schedule that has a maximum tax rate of 35 percent with a $1 million exclusion. For gifts made after December 31, 2010, the Act recouples gift and estate taxes to apply a maximum rate of 35 percent with a $5 million exclusion.

The Act extends some technical provisions enacted under EGTRRA that effect the GST tax, and provides an exemption of $5 million (equal to the estate tax exclusion) with a GST tax rate of zero percent for transfers made in 2010. For transfers made after 2010, the GST tax rate would equal the highest estate and gift tax rate in effect for the year in which the transfer occurs. For example, in 2011 and 2012, this rate would be 35 percent.