New Estate, GST and Gift Tax Rates

Calendar Estate & GST Tax Gift Tax Highest Estate, Gift
Year  Exemption  Exemption & GST Tax Rate

2002.   $1 million*  $1 million  50%
      
2003.   $1 million**  $1 million  49%
      
2004.   $1.5 million  $1 million  48%
      
2005.   $1.5 million  $1 million  47%
      
2006.   $2 million  $1 million  46%
      
2007.   $2 million  $1 million  45%
      
2008.   $2 million  $1 million  45%
      
2009.   $3.5 million  $1 million  45%
      
2010.   (Tax Repealed)  $1 million  35%
      

(Continued from Page 1)
If and when estate and GST taxes repeal becomes effective in 2010, gift tax will continue at the rate of 35% for any gifts over $1,000,000.  Congress chose to retain the gift tax to preserve the integrity of the income tax.  Without the gift tax, property owners would be able to transfer income producing assets to others in lower  income tax brackets.  Along with the 2001 Act comes a new "completed gift rule", phase out of the state death tax exemption and a modified "carry over basis" for inherited property. See the related story regarding Carryover Basis on Page 3 of this Newsletter.
Turn to Page 2 of this Newsletter for Estate Tax Planning steps to take for eventual estate tax repeal.

      SEMINAR

For more details on financial and estate planning under the 2001 Act, please attend one of the seminars inwhich I will be participating on October 16, 2001 at 11:45 a.m. or on November 8, 2001 at 11:45 a.m. at the Riomar Bay Yacht Club.  Lunch will be served.  To make your reservation, please contact Rhonda at Treasure Coast Financial Planning 562-4114 .