If the gift tax exemption reverts to $1 million in 2013, as slated, some commentators opine that the IRS will attempt to collect gift taxes on gifts in excess of $1 million made when the exemption amount was $5 million.  I do not see how the government can do this either legally or practically.

2012 is a great year to incorporate gifting into an estate plan.   The gift tax exemption amount is $5 million, interest rates are low, and asset values are depressed.  In 2013, while interest rates are supposed to remain low, the gift tax exemption amount is supposed to revert to $1 million.

The estate of Australia’s 4th wealthiest man prevailed in a claim filed by his mistress, a former Penthouse Pet, for support and $5 million.  The court found that the absence of a written agreement was one of the big factors against her claim.

The WSJ has an opinion piece favoring a wealth tax as a means of raising revenue.  Responses which mostly debunk it are here.  I agree with those who think a wealth tax is a stupid idea.

I am done posting for the year and will resume posting in the new year.  Until then, enjoy the best Christmas song ever by Darlene Love.