Estate Tax Bill Introduced, Containing More Pleasant Surprises for the Rich

[Better Believe It]

Estate Tax Bill Introduced, Containing More Pleasant Surprises for Rich
December 10, 2010

Senate Majority Leader Harry Reid (D-NV) has introduced legislation implementing the tax-cut deal that President Obama struck with Congressional Republicans. As expected the legislation restores the estate tax for two years with an exemption of $5 million and a 35 percent tax rates for estates over that amount, but the bill also contains several unexpected provisions that would make it easier for the well-off to transfer their wealth tax-free. One of the provisions would be such bonanza for the wealthy that it may be too much for Democrats, or even some Republicans, to swallow.

One of the surprise provisions would make the new $5 million exemption and 35 percent rate retroactive to January 1, 2010. In other words, the heirs of those dying in 2010 will have a choice between applying the new rules or electing to be covered under the rules that have applied in 2010 -- no estate tax but only a limited step-up in the cost basis of inherited assets. (For an explanation, click here.)

A second provision of the Reid legislation would make the estate tax exemption "portable" between spouses. This means that if the first spouse to die does not use all of his or her $5 million exemption, the estate of the surviving spouse could use it.

But a third provision is another matter. It would set the gift tax and generation-skipping transfer tax exemptions at $5 million as well. (For 2010 there is no generation-skipping tax, while the gift tax exemption has been $1 million for a number of years.) A 35 percent tax rate would apply to gifts or transfers over the $5 million threshold. "The rich will have a two-year window in 2011 and 2012 to protect huge amounts of their estates from taxation for generations," comments Staker.

Read the full article at:

http://www.elderlawanswers.com/resources/article.asp?id=8822&Section=4&state=

[stevedeshazer]

1. It just keeps getting worse.

:grr:

[sasha031]

2. I can't take it anymore

[subterranean]

3. This is succeeding beyond Kyl's wildest dreams.

The estate tax giveaways would never pass the Democratic Senate on their own. But by attaching them to the Obama-GOP tax cut deal and threatening to scuttle it if he doesn't get his way, it looks like he'll get everything he wants, short of a total repeal.

[somone]

4. Their Christmases keep getting better and better

with wonderful surprises from taxpayers

[Hannah Bell]

5. was that in the deal obama cut? it's like the rich are trying to move all their money out of the

country before the flood hits.