By Lou Carlozo
CHICAGO | Tue Aug 7, 2012 11:44am EDT
(Reuters) – Faced with the possibility of the lifetime gift tax exemption dropping precipitously next year and the estate tax rate rising, wealthy individuals are rushing to transfer their assets to family members.
It is no wonder that 73-year-old commercial real estate appraiser Jim Levy is busier now than he ever was – and that is saying a lot, considering he has been in the business for 50 years at Appraisers and Planners Inc of New York City, which his father started in 1933.
“It’s crazy right now,” says Levy. “And this is just the beginning.”
Right now, federal law provides a lifetime gift tax exemption of $5.12 million for individuals, and double that amount for married couples pooling their resources.
What is more, estate taxes on anything above that cap top out at 35 percent, 15 percentage points lower than the ceiling just a decade ago. But unless Congress extends this Bush-era tax cut beyond 2012, the cap will return to its lowest level since 2002: $1 million per person, with a top tax rate of 55 percent.