The federal estate tax was supposed to disappear, at least temporarily, in 2010. Many of my clients have been having a morbid chuckle over this strange situation, joking about how, if one is going to die, 2010 is a darned good time for it - from their heirs' point of view, anyway. Even if you have a taxable estate, you surely want to stick around this life beyond 2010! But like my clients, you're probably hoping for an early grave for the estate tax. Its repeal would mean you'd be able to pass more tax-free money to your heirs.
At the moment, it looks like you and your heirs could be in for a disappointment. Congress has the power to eliminate the tax -- but it also has the power to eliminate the temporary 2010 reprieve we've anticipated. The latter is not beyond the realm of possibility, given the dismal state of our national finances. It's all up to our elected officials. And as you can imagine, their views on this topic are pretty much split along partisan lines.
No one knows where Congress is going to go with this issue. All we know for sure at the moment is this:
- Until Dec. 31, 2009, any estate of $3.5 million and over is subject to federal estate tax that caps at 45%.
- If Congress takes no action with respect to 2010, that will be an estate tax-free year.
- In 2011, the estate tax is scheduled to return, with an exemption of $1 million and a top tax rate of 55%. But this too could change, depending on what Congress does.
We'll just have to wait and see how it all shakes out on Capitol Hill. Read more...
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1 comment:
The estate tax is not good for the housing market
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