Unfortunate that the Estate Tax Law is Unclear

It is bad enough that we have high tax rates in Louisiana and in the United States. But perhaps it is worse when we don't even know if we have a tax!

About ten years ago, Congress enacted tax legislation that provided the following:

• $3.5 million dollar estate tax exemption for deaths occurring in 2009
• No federal estate tax for deaths occurring in 2010; and
• $1 million exemption for deaths occurring in 2011 and beyond.

All of the so-called experts predicted that Congress and the President would act prior to December 31, 2009, and "bring back" the tax effective for years 2010 and beyond...but they failed to act! Actually, the House of Representatives passed the legislation in early December, 2009, but the Senate never got around to it.

Then, shortly after the first of this year, everyone predicted that Congress would quickly enact legislation bringing back the estate tax, and making those estate tax laws retroactive back to death occurring on or after January 1, 2010...but they didn't do anything.

Now, it is March 10, 2010, and unfortunately, families of decedents have no idea what to do. Is Congress going to enact legislation that will bring back the estate tax and preserve the step-up in basis? Or will Congress fail to act and we'll have a one year hiatus from the estate tax, but heirs will inherit appreciated assets with a carry-over basis instead of a step-up in basis?

Who knows? We are now is a state of limbo. Congress should act immediately regarding the estate tax so that families that are grieving the loss of a loved one can also have some certainty with regard to the estate tax and the settling the estate of a loved one.

Comments

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[Ali]

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