Last month, the U.S. House of Representatives passed a permanent extension of the estate tax at 2009 rates, which carries a $3.5 million exemption for individuals and $7 million for couples, while taxing the rest of the value of the estate at 45 percent. However, after some wrangling in the Senate, that body failed to take action on estate tax legislation as it wrapped up its 2009 business.
Therefore, the estate tax expired on Jan. 1 for one year only. On Jan. 1, 2011, unless Congress acts, the estate tax will come roaring back with a very low $1 million exemption, with anything above that figure taxed at 55 percent. However, most Congressional observers predict the Senate will take action early this year. What shape any final bill will take is obviously unknown at this time. The best advice for anyone with an estate plan is to meet with a qualified professional to re-evaluate that plan.
Reprinted in part from Livestock Marketing Assn.