2007 Tax Changes: Information for Seniors
Apr 12th, 2007 by Gillian
There are a number of changes in the laws affecting estate, gift, and capital gains taxes. Here is some brief information on the changes.
Federal estate tax law amounts–For many people over age 50, the home is the largest asset in their estate. The amount in an estate that is excluded from Federal Estate Tax is $2 million for 2007 and 2008. The exclusion rises to $3.5 million for 2009.
Gift tax–An individual can make a gift of up to $12,000 to any other individual without paying a gift tax or reporting the gift. Just a reminder: The tax on gifts over $12,000 is paid by the donor–the person giving the gift.
Capital Gains Tax–In 2007 and 2998, the maximum tax percentage is 15% on long-term (over a year) capital gains (sales price minus basis, which varies based on the circumstances). On December 31, 2008, that maximum rises to 20%. The minimum tax percentage fluctuates. It is 5% in 2007, dips to a zero minimum (0%) in 2008 and then goes up to 10% on December 31, 2008. In 2007, the capital gains tax exemption amounts remain the same: $250,000 is not subject to tax for an individual, and for couples, the figure is $500,000.�
