NB: This article was published on January 1, 2010 and contains information that is outdated but included on this website for historical context. For current information regarding the estate tax, read: Does Every Estate Have to Pay an Estate Tax?
A recent article from MarketWatch suggests the estate-tax uncertainty will drag for a while, and summarizes some of the various estate tax proposals that are currently before Congress:
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- One Senate bill proposed by Democrat Blanche Lincoln and Republican Jon Kyl calls for a $5 million exemption and a maximum tax rate of 35 percent to be phased in over ten years.
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- Another group of Senators have proposed a bill that reinstates last year’s exemption amount and tax rate, but increases the tax rate to 50 percent for those with taxable estates valued at between $10 and $50 million, and 55 percent for estates worth more than $50 million. It also adds a10 percent surtax for assets above $50 million.
- The House of Representatives has passed a bill that reinstates last year’s exemption amount and tax rate, which allows individuals to pass $3.5 million ($7 million for married couples) in assets free of estate taxes.
Unfortunately, a compromise does not seem likely at this point, with many attorneys expecting the uncertainty to drag on into the New Year. If Congress does not act in 2010, those with assets valued at over $1 million will be subject to estate taxes of 55 percent starting on January 1, 2011.
