Future of Estate Tax Remains Shrouded, Complicates Planning

In 2010, the estate tax disappeared and without prior Congressional intervention, it will reappear again in 2011, but in a different form. The lack of consensus on how to address the estate tax, along with the full congressional agenda during the past year, prevented congressional members from comin...

Full description

Saved in:
Bibliographic Details
Published inExecutive's Tax & Management Report Vol. 73; no. 2; p. 1
Main Author Massey, Bart
Format Trade Publication Article
LanguageEnglish
Published Riverwoods CCH INCORPORATED 01.02.2010
Subjects
Beneficiaries
Capital losses
Estate planning
Estate taxes
Federal legislation
Gift taxes
Grantor retained annuity trusts
Income taxes
Inheritances
Tax planning
Transfer taxes
United States > US
Online AccessGet full text

Cover

More Information
Summary:In 2010, the estate tax disappeared and without prior Congressional intervention, it will reappear again in 2011, but in a different form. The lack of consensus on how to address the estate tax, along with the full congressional agenda during the past year, prevented congressional members from coming to an agreement. In 2011, the estate tax will be reinstated, but under the guise of pre-2001 law, using a top rate of 55% and an exemption of $1 million. Gone is the former step-up basis regime that allowed estate beneficiaries to inherit estate assets at fair market value at the time of the decedent's death. The 2010 law, however, will allow a step-up in basis to be applied up to certain limitations. The Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009 (H.R. 4154) would make permanent a top rate of 45% and exemption amounts of $7 million for couples and $3.5 million for individuals. It also would repeal carryover basis rules. For inheritances and gifts, the Administration suggested codifying the legal doctrine of "duty of consistency". Another proposal would disregard certain factors that generally are held to increase discounts applied to the transfer of minority interests in family-controlled entities.
ISSN:1098-1594