On Estate and Gift Taxation, Federal and State Tax Policy Part Company
As you probably know, Congress and the President reached a deal that, among other things, increased the federal estate and gift tax exemptions, respectively, from $3.5 million to $5 million and from $1 million to $5 million. Right now those changes only apply to 2011-2012, but we expect them to have legs, their longevity ultimately depending on the outcome of the 2012 election.
Meanwhile, the State of Connecticut has moved in the opposite direction. The budget signed on May 4, 2011 reduces the state's exemptions from the $3.5 million that applied in 2010 to $2 million , retroactively to January 1, 2011. Unlike the federal change, the state legislation does not have a termination date.
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