Combined Estate Tax Exemtion for $10mil

Starting in 2011 widows and widowers can add to their own estate tax exemption the unused exemption of the spouse who died most recently. This provision, plus an increase in the exemption amount to $5 million per person, enables married couples together to transfer as much as $10 million tax-free to their children or other heirs, either by making lifetime gifts or through estate plans. This 2-year provision expires January 1, 2013

New estate Tax Rates

Here is a quick summary of the new Estate Tax rates signed into law December 17, 2010

2010
Estate Tax
Exclusion amount: $5,000,000
Maximum tax rate: 35%
Carryover basis: Option to elect carryover basis instead of estate tax treatment

Gift Tax
Exclusion amount: $1,000,000 (no change)
Maximum tax rate: 35% (no change)

2011-12
Estate Tax
Exclusion amount: $5,000,000
Maximum tax rate: 35%

Gift Tax
Exclusion amount: $5,000,000
Maximum tax rate: 35% (no change)

Congress Fiddling on Estate Tax Reform

After 8 years of doing nothing, the House of Representatives has not reached a consensus on revising the Estate Tax. The current estate tax rate is 45 percent with an exemption level of $3.5 million for individuals and $7 million for couples. Unless something is done, in 2010 the rate and exemption level will fall to zero and then jump up to 55 percent and $1 million, respectively, in 2011.

Some Congressmen want to extend the current structure for one year. In the meantime, the taxpaying public is left to just guess.

Senate Working on Estate Tax Revision

After 8 years of delay, the Senate is finally considering a revision to the Estate Tax. When the Bush estate tax reduction were passed in 2001. the Pres. Bush told Congress that 8 years would be enough time for the revision of the Internal Revenue Code Estate Tax provisions. As a method of assuring Congress would get busy, the law provides for a repel of the Estate Tax for 2010. Now, after dilly-dallying for 8 years, the Democrats don't want to see the Estate Tax Revenue disappear. They are scrambling to come up with a revision.

A bipartisan group of Senators is proposing a gradual reduction of the Estate Tax rate from 45% to 35% in 2019. Also the exemption would increase to $5 mil by 2019. Full Article....

Health Care Reform - End to Charitable Deductions?

Under the guise of paying for health care "reform," President Obama is trying to eliminate charitable deductions. Aside from further damaging already hurting charities, many estate plans and lifetime giving plans need to be reviewed. If the Obama plan gets approved, many proposed charitable deductions will need to be reduced to pay the federal (and State) income and estate taxes.

Estate Tax is Back Again!

Estate Tax is Back Again!

The House and Senate each approved a Fiscal 2010 Budget Resolution which keeps the Federal Estate Tax into 2010. President Bush and Congress set-up Estate Tax Reduction in 2001 with a planned elimination in of the estate tax  on January 1, 2010 THE house and Senate passed budget resolutions that conforms with President Obama's goal of re-instituting the Estate Tax.  The estate tax exemption amount will be frozen at  $3.5 million for single taxpayers and $7 million for married couples – the same rule that applies in 2009 under the Bush legislation. In addition, the Obama Administration has called for indexing the exemption amounts for inflation beginning in 2010. Congress must actually pass legislation to enact the tax changes.click here