The gift tax continues in 2010 with the same $1 million lifetime exclusion amount. The gift tax rate for 2010 (at least for now) is 35%, down from 45% in previous years. The gift tax annual exclusion amount remains at $13,000 per donor per donee.
Many of the estate and tax planning strategies we have utilized in previous years are still effective for 2010 and later years. These techniques include annual exclusion gifting, irrevocable life insurance trusts and sophisticated leveraged gifting techniques. Many of the sophisticated techniques, such as Grantor Retained Annuity Trusts (GRATs) and Installment Sales to Intentionally Defective Grantor Trusts (IDGTs), work particularly well in todayʼs low interest rate environment.