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Sunday, February 17, 2013

Estate Tax Revisited

A previous post discussed the spectre of estate taxes. The net of it was that the Tax Relief Act of 2010 provided for an exemption of $5M, that for foreigners (e.g. Canadians) would be prorated by the ratio of US assets to worldwide assets. For many this would reduce substantially or eliminate estate tax. But the catch was that the provisions of the act would expire at the end of 2012. Yikes!

Well, the "fiscal cliff" came and went, and sure enough on January 3, 2013 the "American Tax Relief Act of 2012" was passed. It made permanent and indexed for inflation the previous exemption.

As usual there is a lot of detail and complexity in the tax provision, and you should consult with your own professional advisors. But I am not going to worry about it as it looks like for our situation it will dramatically reduce or eliminate US estate tax.

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