Around ten years ago, congress passed a law stating that in the year 2010 there would be no estate taxes. Nobody in the tax industry felt that this would really happen. Imagine this, Warren Buffett, whose worth billions of dollars in 2010, dies and he completely escapes estate taxes. The joke in the industry was to “advise your clients to die in 2010.” That’s the kind of humor that we tax people have.
Well, everybody thought the law would change and then five years passed; and now we are here three weeks before the end of the year and congress is now starting to say, “We’re going to lose a lot of money if there are no estate taxes in 2010; maybe we should change the law.”
Now they are discussing the possibility of making sure that there is an estate tax in 2010. Best guess is that they’ll pass a law sometime before the end of the year. Maybe they’ll leave the estate tax rate at three and one half million dollars. Who knows?
Oh, that’s not all, if congress does nothing the estate tax rate will revert back to $1,000,000 in 2011 with a high rate of 55%.
We’ll keep you posted as congress deals with this issue at the last minute.
The Washington Post has more information on the Estate Tax. Click here to read: Extending The Estate Tax.
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