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 Then, for 2010, the tax is repealed entirely.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 ...
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.
Question....What is difference between capital gains and estate taxes (land or farm).
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.
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!
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.
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