A married couple with a $100 million estate that had used up its exemption with gifts during their lifetime would owe about $40 million in estate taxes this year if the second spouse dies in 2013, or $5 million more than if the death had occurred on Dec. 31, 2012, Harrington said.
Among the tax provisions affecting 2012 returns that Congress extended was the ability of people age 70 1/2 and up to transfer up to $100,000 from an individual retirement account directly to a charity.
“That’s been a popular one,” said Tim Steffen, director of financial planning at Robert W. Baird & Co. in Milwaukee. The new law lets people who withdrew money from an IRA in December donate it to a charity this month and apply it to their 2012 taxes. The overall benefit was extended through 2013, not permanently as were many of the other items.
“You may not like all the provisions,” Steffen said of the budget deal. “At least now you know what you’re dealing with. We got the certainty we’ve all been looking for.”