Articles Posted in Estate Taxes

by Michael Ettinger, Esq.

The political struggle between the two major parties over the Federal estate tax, or “death tax” as its opponents prefer to call it, continued with the expiration of the estate tax on January 1, 2010 for one year. On January 1, 2011, the estate tax is scheduled to reappear but not for estates over 3.5 million at a tax rate of 45%, as in 2009 when the tax expired. Under the Bush era tax cuts, enacted in 2001, the estate tax in 2011 and beyond will be imposed on estates over one million, at a tax rate of 55%. Where do these latter figures come from? Those were the exemptions and tax rates in 2001 when the new law took effect. It was assumed that Congress would pass amending legislation some time over the intervening nine years to correct the problem.

Politics being what it is, the parties could not agree. A proposal to extend the 3.5 million exemption of 2009 for an additional year, giving Congress an additional year to negotiate a new estate tax regime, died in the Senate.