Pass Along Real Estate Now
Right now, for gift tax purposes, there is a maximum gift tax rate of 35% and an exemption of $1 million. Take advantage of your $1 million gift tax exemption by gifting property — like real estate — that has the potential to appreciate in value. Give it to your heirs now rather than at your death. Regardless of how much that property appreciates after you give it away, only the value on the date you give it away is used to determine your estate tax when you die.
If you give property to someone who is a “skip person,” you are not subject to GST tax â€“ but you still will be subject to gift tax. In 2010, the top gift tax rate of 35% is a relative bargain, considering the gift tax rate is set to surge to 55% in 2011. And even if Congress changes that, most experts don’t see lawmakers making the gift tax rate lower than it is is now.