Basic Exclusion Amount

By: Martin M. Shenkman, CPA, MBA, JD

This amount is $5 million in 2011 and in 2012 will be $5 million, indexed for inflation from 2010 based on the TRA relief. The exclusion had previously been called the "applicable exclusion amount." In 2009, this amount was $3.5 million. In 2013, absent yet another change in the law, this amount will be $1 million. The key conceptual change of the TRA is that a new building block was required in the tax framework to address the concept of portability of a deceased spouse’s unused exclusion to the surviving spouse. So the new math/definitions are: Basic Exclusion Amount + Portable Amount = New Applicable Exclusion Amount.

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