“Middle Class Tax Cut Act of 2010″


There are discussions underway in both parties about potential compromise options for the estate tax.  In order to pass a new provision on estate taxes, the senate requires 60 votes.  If this is opposed by the president, 67 votes are necessary to override his veto.    Under the law as it stands today estates with over $1.3 million are required to file an informational return to show the cost basis of assets purchased decades earlier.  This is likely to be very difficult for executors and a very uncertain area for the IRS.  Heirs of estates with assets totaling between $1.3 and $4.3 million  would be better off in the year 2009 under those limits.  Estates over $4.3 million would do better under the 2010 provisions.  The law is full of traps, demands and detailed record keeping.  Many hope that Congress will wind up allowing people to choose which system they want to  use.  This seems to be what is being proposed by Senator Baucus.

Senator Max Baucus, Chairman of the Senate Committee on Finance, introduced the “Middle Class Tax Cut Act of 2010″ which would make the Bush income tax cuts permanent for individuals making under $250,000 per year.  

We can guess what the transfer tax laws will be this year and next but for estate tax purposes, the only law that matters to most of my clients is the law that exists on the date of their death.  This may be 20 years or more in the future.  What Congress does now may or may not have any effect on the law when you die.  But for today, this may be hopeful that Congress will put something into effect soon.

Please find the full details of Senator Baucus’s proposals here: http://finance.senate.gov/legislation/details/?id=bda915fc-5056-a032-5262-6a1899fee4e3

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