Tax cut deal will allow parents to give $10 million donations, tax free

There’s nothing quite like putting the interest of a handful of people so high on the list during an economic crisis. So imagine, the likes of Stanley O’Neal, Chuck Prince or Angelo Mozillo can easily shovel over millions to their children without paying taxes. The millions they received for business that was wiped off the books, which led to the taxpayer bailout of Wall Street, is now a gift from the American taxpayer to their children. How screwed up are the priorities of Congress to allow this? Deals like this are sickening.

Families would be able to make tax- free gifts to their children or others of as much as $10 million, an increase from the current limit of $2 million, under the tax-cut bill Congress is debating this week.

Beginning in 2011, an individual U.S. taxpayer’s lifetime gift-tax exclusion will jump to $5 million, up from $1 million currently, according to the legislation. Gifts from living parents allow taxpayers to transfer assets such as cash, stocks or shares of a business to their kids and let the value grow outside of the couple’s estate, said Jim Cundiff, an estate planning attorney with McDermott Will & Emery, who’s based in Chicago. Unifying the estate and gift tax exemptions is one of the biggest benefits in the measure, he said.

“You could transfer $10 million next year without paying any tax,” Cundiff said. “That’s a big tax-free gift. This benefit evaporates in two years, so take it while you can.” Parents may use trusts to give the money to descendants if they’re concerned about giving a lot of money directly to their children, he said.

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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