TIME IS RUNNING OUT
TIME may — or may not — be running out for one of the biggest tax breaks for wealthy Americans: the chance to give up to $5.12 million to heirs tax-free and then pay a comparatively low 35 percent rate on any gift above that. The break is scheduled to expire in six months, but no one will hazard a guess about its fate because it is just one of many tax and spending measures expiring at the same time.
When this break was agreed upon by President Obama and the Republican Congress at the end of 2010, I expected it would spur the wealthiest to give away huge amounts of their estate to take advantage of the break. (The original $5 million limit was increased this year for inflation; it is separate from the $13,000 annual exclusion gift.) But the rush that I expected was initially just a trickle. While the tax break was enticing, the fear of what lay ahead in the economy and financial markets made people cautious.