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2013 Inflation-Adjusted Figures

Monday, November 05, 2012
By: Nikki Marie Oliveira, Esq., LL.M., Margolis & Bloom, LLP

Rev. Proc. 2012-41 was recently released with the inflation-adjusted items for 2013.

Gift Tax. The figure that is arguably most important to those of us in the T&E field is the annual gift exclusion amount under § 2503. This amount has been increased from $13,000 to $14,000. Practitioners will now be advising clients that gift-splitting is permitted at a rate of $28,000. We’ll get used to it. For gifts to a noncitizen spouse under §§ 2503 and 2523(i)(2), the exclusion has risen from $139,000 to $143,000. Recipients of gifts from certain foreign persons are required to report gifts under § 6039F if the aggregate value of gifts received in a taxable year exceeds $15,102 (the threshold in 2012 was $14,723).

Estate Tax. For estates of decedents dying in 2013, if the personal representative elects to use the special use valuation method under § 2032A for qualified real property, the aggregate decrease in the value of qualified real property resulting from the election for purposes of the estate tax cannot exceed $1,070,000 (formerly $1,040,000). The dollar amount used to determine the "2-percent portion" for calculating interest under § 6601(j) of the estate tax extended as provided in § 6166 is $1,430,000 (up from $1,390,000).

Foreign Earned Income Exclusion. Under § 911(b)(2)(D)(i), this figure is now $97,600 (previously $95,100).

Please note that Rev. Proc. 2012-41 did not address a number of items, including the following: the tax rate tables under § 1; the adoption credit under § 23; the child tax credit under § 24; the Hope Scholarship and Lifetime Learning Credits under §25A; the earned income credit under § 32; the standard deduction under § 63; the overall limitation on itemized deductions under § 68; the qualified transportation fringe benefit under § 132(f); the adoption assistance exclusion under § 137; the personal exemption under §151; the election to expense certain depreciable assets under § 179; the interest on education loans under § 221; and the unified credit against estate tax for estate of decedents under § 2010(c). We will keep an eye out for future guidance regarding these items and will update you accordingly.

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