The Tax Relief Act of 2010 made significant changes to the gift, estate and generation-skipping transfer tax regimes by increasing the amount each individual can give without incurring tax from $1 million to $5 million. The increase was not permanent however, and rumor has it that it may be in jeopardy. To avoid any risk, those who have decided to use their full exemptions should do so no later than December 31, 2011, and, if feasible, November 22.

The Rumors

The Tax Relief Act of 2010 made significant beneficial changes to the gift, estate and generation-skipping transfer tax regimes. Most important, it increased the amount each individual can give without incurring gift tax and generation-skipping transfer tax to $5 million from $1 million. For married individuals, the combined exemptions can be as high as $10 million. The 2010 increase was not a permanent one. Congress scheduled the exemption to return to $1 million after the end of 2012.