Gift Tax Annual Exclusion Amount for 2011 Remains at $13,000

Each year, the prior Consumer Price Index (CPI) is used to compute the gift tax annual exclusion amount for the following year.  There is uncertainty over which tax rates will apply for 2011 based upon the sunset provision of the Economic Growth and Tax Relief Reconciliation Act of 2001  ("EGTRRA") and the extent to which Congress may act to change it.  Under the sunset, provisions of EGTRRA, the Internal Revenue Code of  1986 will be applied after 2010 as if the provisions of EGTRRA had never been enacted.  However, under all laws and proposals to date, the Gift Tax has remained and based upon the inflation data, the gift tax annual exclusion is set to remnain at $13,000.  This appears to be one of the few areas of certainty for next year.  But stay tuned, as the only thing constant in tax law is change.