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2010: A Good Year to Die? (The year the Death Tax disappears, but only for a year)
RealClearMarkets ^ | 12/22/2009 | Josh Barro

Posted on 12/22/2009 7:08:23 AM PST by SeekAndFind

Next month, for one year only, the federal estate tax is set to go away. Don't break out the cyanide capsules just yet though, because Congress is likely to reinstate the tax retroactively sometime during 2010, as part of a permanent estate tax reform. When doing so, Congress should make sure to get the reform right - this means setting a high exemption so few taxpayers have to comply with the tax, and indexing the tax to inflation so it does not impact smaller estates over time.

A temporary repeal is coming because of the structure of the 2001 Bush tax cuts. The Bush tax reforms gradually cut the estate tax rate and raised the share of an estate exempt from tax, leading to the 2009 exemption of $3.5 million and top rate of 45%. Then, for 2010, the tax is repealed entirely.

By default, tax rates for 2011 revert to prior law, including a 55% top estate tax rate and a $1 million exemption. The idea was that Congress would act later to extend the Bush tax cuts or make them permanent, but instead a Democratic majority took hold and such an extension is unlikely. clear pixel

Fortunately, there is a cross-party consensus that estate tax law set for 2011 is too onerous. In the 2008 presidential campaign, both John McCain and Barack Obama proposed permanent estate tax reforms that set a higher cap and a lower rate. Obama proposed to maintain 2009 law indefinitely. McCain sought greater relief with a 15% rate with a $5 million exemption.

A high exemption is important because it greatly reduces the share of taxpayers who face a compliance burden while paying little tax.

(Excerpt) Read more at realclearmarkets.com ...


TOPICS: Business/Economy; Culture/Society; Editorial; News/Current Events
KEYWORDS: 2010; deathtax; estatetax

1 posted on 12/22/2009 7:08:24 AM PST by SeekAndFind
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To: SeekAndFind

I know, we had a death in the family in 2005, and taxes cost us hundreds of thousands. I kept saying too bad he didn’t make it to 2010, we could have bought homes for his grandkids instead of giving it to feds.


2 posted on 12/22/2009 7:10:36 AM PST by buffyt (I don't agree with Obama, Pelosi, Reid, Nelson, Landreiu, does that make me RACIST?)
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To: SeekAndFind

Headline is misleading.

From what I’m reading, any estate in 2010 could be tied up legally because Congress will almost certainly rewrite the estate tax laws and can impose a retroactive tax on property inherited but not taxed in 2010.

What a mess.


3 posted on 12/22/2009 7:13:10 AM PST by Jedidah
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To: SeekAndFind
Don't break out the cyanide capsules just yet though, because Congress is likely to reinstate the tax retroactively sometime during 2010

Delusional,optimistic or both.

4 posted on 12/22/2009 7:14:15 AM PST by 09Patriot (You can take your change on down the road and leave me here with mine)
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To: buffyt

I remember how Art Linkletter said how he hated the death tax and that he was going to hold on to 2010 to die. He turns 98 this year.


5 posted on 12/22/2009 7:14:15 AM PST by MarkeyD (I support the Secret Service but not their mission.)
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To: SeekAndFind
Better die early. If you wait until December 31 Congress may have increased the tax. Also, even if you die early Congress might dig you up and tax you retroactively.
6 posted on 12/22/2009 7:14:29 AM PST by KarlInOhio (Gore is the fifth horseman of the apocalypse. He rides an icy horse bringing cold wherever he goes.)
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To: SeekAndFind

The House has ALREADY voted to reinstate the death tax at 45% with a $3.5 million exemption (which means that an estate valued at $3.500001 million would be taxed at 45%) immediately. Thus, if the senate follows suit, 2010 will not be a good year to die after all.


7 posted on 12/22/2009 7:15:47 AM PST by VRWCmember
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To: SeekAndFind

Don’t think you can hide any family property behind a trust. The government is working overtime to come up with a way to break trusts, so that every bereaved family will have to impoverish itself.

If you listen to some Democrats, they truly *hate* the very idea of inherited money or property of any kind.


8 posted on 12/22/2009 7:19:01 AM PST by yefragetuwrabrumuy
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To: Jedidah

http://www.forbes.com/2009/12/17/estate-tax-lapse-step-up-basis-personal-finance-planning-mess.html

FORBES (Dec. 17 ‘09) Congress Throws Estate Plans Into Disarray: Lawyers see litigation and administrative nightmares resulting from political impasse.


9 posted on 12/22/2009 7:20:05 AM PST by Jedidah
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To: VRWCmember
The House has ALREADY voted to reinstate the death tax at 45% with a $3.5 million exemption (which means that an estate valued at $3.500001 million would be taxed at 45%) immediately. Thus, if the senate follows suit, 2010 will not be a good year to die after all.

Only the 1st dollar over 3.5 million is taxed at 45%

10 posted on 12/22/2009 7:26:44 AM PST by cynicalman
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To: SeekAndFind

Vultures taking a “cut” of a dead person’s property is evil and obscene!


11 posted on 12/22/2009 7:37:33 AM PST by MarineBrat (Better dead than red!)
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To: cynicalman
Only the 1st dollar over 3.5 million is taxed at 45%

What about the second and third dollar? :)
12 posted on 12/22/2009 7:38:36 AM PST by SeekAndFind
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To: SeekAndFind

What is the status of the Bush Income Tax Cuts? Do the Income Tax Cuts expire on January 1, 2010? Will workers have higher deductions from their paychecks beginning January 1?


13 posted on 12/22/2009 7:46:23 AM PST by Presbyterian Reporter
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To: cynicalman
The Death Tax is the government's last chance to tax you.

The 0bama government will not let you R.I.P, count on it.

14 posted on 12/22/2009 7:53:46 AM PST by TYVets (Let's Roll!!! The leadership of the GOP has no spine and no guts, but we conservatives do)
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To: MarineBrat

Couldn’t agree more.

A person works their whole life to accumulate wealth, bearing the burden of over-taxation every step of the way. They risk their capital to do it. They expend their sweat to do it. They experience losses as well as gains, but persevere and wind up on top when their life comes to an end.

So the government, which didn’t risk a thing, didn’t help but actually served as an anchor around their neck, then feels that it is owed nearly half the deceased’s property, and the relatives aren’t entitled to it.

If you didn’t know anything more about a government than this, you would know if that government had grown to the point it was consummately evil, and even illegitimate.


15 posted on 12/22/2009 7:57:20 AM PST by DoughtyOne (Merry Christmas to all... and to all a good night! (remember the reason for the season))
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To: Presbyterian Reporter
What is the status of the Bush Income Tax Cuts?

If nothing is done, Nearly all of the Bush cuts—individual rates, capital gains, dividends, estate tax—are set to expire after 2010. Sixty votes are needed in the 100-member Senate to pass permanent tax cuts.

The problem with having tax cuts that expire is they only work during the beginning few years that they are in effect. As the expiration date draws closer, businesses have to re-balance and recompute their books to cope with the looming expiration.

UNCERTAINTY is the enemy of business. As the tax climate ( and ultimately business climate ) becomes UNCERTAIN, businesses will be reluctant to hire because they are unsure about the future.

HENCE OUR DOUBLE DIGIT UNEMPLOYMENT. Unless this tax is extended by several more years or better still, MADE PERMANENT, I don't see how we can solve our problem of HIGH UNEMPLOYMENT. We might have to get use to it while Obama is still in power.
16 posted on 12/22/2009 8:05:39 AM PST by SeekAndFind
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To: SeekAndFind

I wonder how many families are forced to balance the cost of nine more days of life support vs. the dollars gained by a January first death date.


17 posted on 12/22/2009 8:14:34 AM PST by JimRed ("Hey, hey, Teddy K., hot enough down there today?" TERM LIMITS, NOW AND FOREVER!)
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To: MarkeyD
I remember how Art Linkletter said how he hated the death tax and that he was going to hold on to 2010 to die. He turns 98 this year.

One of my favorite people.

18 posted on 12/22/2009 8:16:25 AM PST by JimRed ("Hey, hey, Teddy K., hot enough down there today?" TERM LIMITS, NOW AND FOREVER!)
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To: KarlInOhio

“Congress might dig you up and tax you retroactively.”

Living trusts.
Real trusts.
Go off sheet like Mozart.


19 posted on 12/22/2009 8:17:47 AM PST by combat_boots (The Lion of Judah cometh. Hallelujah."Our middle regiment, Gloria Patri, Filio et Spirito Sancto.)
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To: yefragetuwrabrumuy
If you listen to some Democrats, they truly *hate* the very idea of inherited money or property of any kind.

Obviously those RATs are not named Kennedy...

20 posted on 12/22/2009 8:18:58 AM PST by JimRed ("Hey, hey, Teddy K., hot enough down there today?" TERM LIMITS, NOW AND FOREVER!)
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To: combat_boots
Living trusts.
Real trusts.

Those are a real nightmare if you don't do them 100% correctly, and even then the IRS will fight you on them if your last name isn't Kennedy. My grandfather had one and I believe the family spent more on lawyers than we would have saved in taxes.

21 posted on 12/22/2009 8:26:27 AM PST by KarlInOhio (Gore is the fifth horseman of the apocalypse. He rides an icy horse bringing cold wherever he goes.)
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To: SeekAndFind

Question....What is difference between capital gains and estate taxes (land or farm).


22 posted on 12/22/2009 8:41:44 AM PST by ducks1944 (GOD Bless the USA .)
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To: SeekAndFind

I have slowly accumulated silver and gold coins. My plans are to give them to my children prior to my demise. My wife knows of the plan in case I go first.


23 posted on 12/22/2009 8:42:05 AM PST by PJammers (I can't help it... It's my idiom!)
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To: PJammers
I have slowly accumulated silver and gold coins.

Good for you. I hope you know that FDR banned the ownership of gold during the great depression. I hope Obama and this Congress does not do the same thing ( I know that Obama is an admirer of FDR ).
24 posted on 12/22/2009 8:43:56 AM PST by SeekAndFind
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To: SeekAndFind

I guess if We the People decide to ban gold coins again they would have to “come and get them”. In that case I would defend my stash with cold steel and lead!


25 posted on 12/22/2009 10:43:19 AM PST by PJammers (I can't help it... It's my idiom!)
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To: yefragetuwrabrumuy
"If you listen to some Democrats, they truly *hate* the very idea of inherited money or property of any kind."

HA....we have 3 DEMOCRATS liberal chicks in our family (Mommy (3x divorced) and 2 daughters in 20's) who stand to inherit a good chunk.....I'm hoping Grandmom does NOT die in 2010....so THEY get less! THEY are going to get a lesson in taxes when it happens, that's for sure.

26 posted on 12/22/2009 12:34:01 PM PST by goodnesswins (Become a Precinct Committee Person/Officer....in the GOP...or do NOT complain.)
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