12.17.09
Estate Tax Extension Fails in Senate
The Wall Street Journal reported today that the U.S. Senate will not vote to extend estate taxes before they are scheduled to go away (for a year) on January 1. As a result, under the 2001 tax reform, there will be no federal estate tax due for deaths in 2010, but in 2011 they will return at a 55% top rate on estates over only $1 million. All is not grand for taxpayers since the 2001 law also limits step-up in basis on death to $3 million on assets passing to a spouse and $1.3 million on assets passing to anyone. Planning for capital gains may become more complex than planing for estate taxes was.