Alert: Estate and Gift Tax Provisions of the American Taxpayer Relief Act of 2012

Contact: Carlile Patchen & Murphy LLP (Columbus, Ohio, USA)

We are pleased to provide to our clients and friends this brief summary of the estate and gift tax provisions of the American Taxpayer Relief Act of 2012.

Please note that this summary, believed to be substantially accurate, is based on the Senate Bill as reported, and future tax regulations promulgated by the U. S. Department of the Treasury or legislative clarifications may require revisions to this summary.


  1. The ONLY change from current law is that the top estate tax rate is increased from 35% to 40% for estates of decedents dying after December 31, 2012. The rest of the entire estate and gift tax law remains exactly as it was in 2012, and is made permanent.
  2. The bill makes permanent the current Applicable Exemption Amount of $5M per person, indexed for inflation from 2010. The Applicable Exemption Amount is $5.25M for estates of decedents dying in 2013.
  3. Portability remains, allowing a spouse to pass any part of their unused Applicable Exemption Amount at death to their surviving spouse.
  4. The top 40% rate applies to taxable amounts in excess of $1M (i.e. estates over $6.25M). Lower rates apply below $1M.
  5. The gift and estate tax rates remain unified, so cumulative lifetime gifts in excess of the Annual Exclusion Gifts ($14,000 per donee in 2013) can be made up to $5.25M per person (indexed for inflation) without incurring any gift tax.
  6. The GST Exemption Amount similarly remains at $5.25M per person (indexed for inflation).
  7. Effective as of January 1, 2013, Ohio no longer has an estate tax.
  8. For individuals who have reached age 70 ½, tax-free distributions from an IRA directly to charity up to $100,000, if completed by February 1, 2013, can be treated as if made in 2012.

If you would like to read more about the specifics of the American Taxpayer Relief Act of 2012, we invite you to explore two articles on our website: