Estate Tax Legislation: The Pendulum Swings Again
December 18, 2009 - Back to Deck's Page
Estate Tax Legislation: The Pendulum Swings Again
As we reported previously, the House Representatives voted to freeze the existing estate tax rates and exemptions. However, the Senate has not come to the same conclusion; therefore the present law will continue beyond January 1 until further review has taken place. What does this mean? The Federal estate tax will disappear for the year 2010. It resurfaces in 2011 with only a $1 million exemption. Furthermore, all estates starting January 1 will lose the stepped-up-basis with the heirs obligated to track the original basis on property for capital gains tax in the event the inherited property is ever sold. Presently there would be an exemption on the capital gains tax of $1.3 million. Obviously tracking cost basis on inherited property will become a nightmare.
At this point it is safe to say that the current estate tax law will continue to be a political football therefore making planning that much more confusing for families. Hopefully there will be further guidance available for us all to be able to plan with confidence in the near future.
Deck McCormick
CEO
InSource, Inc.