The estate tax exemption for 2012 rises to $5,120,000, thanks to inflation, this is definitely a boon to small business owners. The tax rate stays at 35%. The annual gift tax exclusion remains at $13,000 per donee.
The special estate tax valuation of real estate is increasing as well. Up to $1,040,000 of farm or business real estate can receive discount valuation.
And more estate tax qualifies for an installment payment tax break.
If a closely held business or businesses make up more than 35% of an estate, as much as $486,500 of tax can be deferred, and IRS will charge only 2% interest.
All in all it works.