Waiting until the very last moment, Congress passed and the President signed the American Taxpayer Relief Act of 2012 on Jan. 3, 2013.

The good news is that a number of key provisions related to federal estate and gift taxes have been made permanent — that is, without an expiration or “sunset” date contained in the current legislation.

This brings an increased level of certainty for professional planners and those who have estates that could be impacted by federal estate or gift taxes.

Many farmland owners and farm families have been concerned during the past two years, wondering what would happen to the estate tax exemption under federal law.

Essentially, under the federal estate tax law as most recently revised in 2010, individuals can transfer to others a basic exclusionary amount of up to $5 million free of federal taxation during lifetime or at death. This figure is adjusted for inflation, so in 2012 it was $5.12 million.

If Congress had failed to act, that tax-free amount would have been automatically reduced to $1 million; and the tax rate for estates over $1 million would have increased to 55%.

Not surprisingly, Congress did not allow this to happen. The new tax law makes the $5 million exemption amount permanent and this exemption will continue to be indexed for inflation.

While the exact figures have not been released, the exemption is expected to be $5.25 million for 2013 and up to $7.5 million by 2020.

The only significant change made by Congress is to the tax rate for gift and estate taxes. The formerly top rate of 35 percent has been increased to a maximum of 40% for estates over the basic exclusionary amount. While this is an increase, it is definitely better than the 55% which would have taken effect if Congress had failed to act — and some observers comment that the 5 percent increase is a reasonable trade-off for the certainty afforded by the new law.