Gift Tax Limit

I've read the same thing in places I'd consider reputable. The transfer would be it, until/unless a higher number were in place. (Isn't the 2012 number $5.25M?)

It's $5 million plus inflation, which the IRS apparently determined (rounded to the nearest $10,000) to be $5,120,000

I've looked into it a bit more, and the way the statutes are written it looks like someone can give that amount this year. But if the lifetime exemption when he dies is lower (it's scheduled to go back to $1 million after the end of this year), his estate will have to include the gift and be taxed on it then.

I'm just curious if I'm missing something.

I didn't read it that way. Tracking and enforcement seems impractical. I die and after non-probate items (401(k), IRAs, etc) the estate can't pay its own tax due. The paper trail is new enough that collection isn't bad. Now, I gift the kid $5M, and in 30 years, I die, penniless (perfect timing). But the kid burned through his money. Tax on the excess $4M (over the return of the $1M exemption) is $2M.

Forget the tracking for a moment, how in the world would they enforce? Of course, your record stands, and you are likely correct. But good luck clawing back decades later.

In the future if the exemption is $1M and you gave $5M of lifetime exemption, then you add $4M to your estate and pay tax on it. If you don't have the money to pay it, it would be handled like anyone who can't pay their bills -- the IRS will try to levy assets, and if there are none then they just forget it as they have no choice. At least that's logical to me. But I suspect the republican strategy is to make this higher limit permanent.