Estate Tax Relief in Proposed Extension of Bush Tax Cuts
The compromise reached between the White House and the Republicans to extend all of the Bush Tax Cuts for two years , also contains signficant estate tax legislation. The proposal, if adopted, would increase the estate tax exemption to $5 million per individual ($10 million for a married couple) and reduce the estate tax rate from the current 55% (effective January 1, 2011) to 35%. While that proposal is far from perfect, a permanent change - even if more taxing - would eliminate a lot of confusion, hesitation, and uncertainty for the majority of Americans in their estate planning process.
Another concern with just a two year plan is the increased uncertainty that will be centered around the 2012 elections. A permanent, or longer term, change in the estate tax obviously allows for long term planning and more certainty. The two year plan, while better than what we have currently, remains an abdication by our Congress of fulfilling their obligation to the country to provide certainty, and sanity, in our system of taxation. While it would be nice to have Congress perform its job and engage in meaningful discussion of permanent tax changes, or at least long term, it appears that we are asking too much of politicians intent on bickering rather than governing. But, at least the two year plan is an improvement that, barring a permanent plan, is better than no action at all.
To get a good explanation of all of the reasons why the temporary two year plan extends the uncertainty surrounding the current estate tax issues, you may want to review the enlightening letter sent by the American Bar Association (Real Property, Probate and Trust Section) delivered to Congress late last week. You can find a copy of the ABA's Letter to Congress here .
Another concern with just a two year plan is the increased uncertainty that will be centered around the 2012 elections. A permanent, or longer term, change in the estate tax obviously allows for long term planning and more certainty. The two year plan, while better than what we have currently, remains an abdication by our Congress of fulfilling their obligation to the country to provide certainty, and sanity, in our system of taxation. While it would be nice to have Congress perform its job and engage in meaningful discussion of permanent tax changes, or at least long term, it appears that we are asking too much of politicians intent on bickering rather than governing. But, at least the two year plan is an improvement that, barring a permanent plan, is better than no action at all.
To get a good explanation of all of the reasons why the temporary two year plan extends the uncertainty surrounding the current estate tax issues, you may want to review the enlightening letter sent by the American Bar Association (Real Property, Probate and Trust Section) delivered to Congress late last week. You can find a copy of the ABA's Letter to Congress here .
Posted by Randy Coleman at 12/8/2010 8:14 AM 
Categories: Estate Taxes, estate tax, estate taxes
Tags: estate planning estate tax
Categories: Estate Taxes, estate tax, estate taxes
Tags: estate planning estate tax
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