A Permanent Estate Tax For The Wealthy

After nearly a decade in flux, there is finally a permanent federal estate tax. In 2013, however, a mere 3,800 estates will be required to pay the tax. Moreover, the total amount paid by this small number of estates will only amount to $14 billion, which is a mere half of the total revenue from five years ago.

Prior to passage of the American Taxpayer Relief Act of 2012 (ATRA), the federal estate tax was in a state of constant flux. In 2001, the effective exemption was $675,000. The exemption amount jumped to $3.5 million in 2009. The ATRA has created the first permanent estate and gift tax in over a decade. As a result of this, wealthy Americans will be able to spend less time arranging gifts in anticipation of changing laws.