Farm gifts have a deadline
Major changes in the level of life-time gifting and tax exempt inheritance will change on Jan. 1, 2013.
Individuals currently have the option to make a major gift and not generate any tax liability. This is the focus of a webinar that is available for your viewing.
A major issue in the process of transitioning a farm from one generation to the next is to minimize potential that the transfer process will trigger a huge tax liability. For the family farm, moving assets from one generation to the next up to $5,120,000 can be achieved by using the lift-time gift option that is currently available.
Michigan State University Extension wants to set the facts straight: The common understanding is that a gift is limited to $13,000 of property per person per year. However, this $13,000 is the size of a gift that one individual can gift to another and remain non-taxable.
Until congress takes action, the $5 million gift option will shrink back to $1 million on Jan.1, 2013, as discussed in the webinar. That is a more than $4 million change that may be taken away as a major tool that many farm families have been using to transition some of the farms’ assets to the next generation.