The federal estate tax lapsed for 2010, and barring no action by Congress it was scheduled to return on Jan. 1 with an exemption of $1 million per person and a maximum rate of 55 percent.
I have good news to share with you. The long wait for action to address the unknown status of the federal estate tax may be approaching an end. In a December 6, 2010 online posting by the New York Times, they reported that President Obama announced a tentative deal with Congressional Republicans on Monday.
An excerpt of the article appears below, and a link to the full article is included. The accompanying photo by Joshua Roberts of Reuters appeared with the article.
Mr. Obama made substantial concessions to Republicans. In addition to dropping his opposition to any extension of the current income tax rates on income above $250,000 for couples and $200,000 for individuals, he agreed to a deal on the federal estate tax that infuriated many Democrats. The deal would ultimately set an exemption of $5 million per person and a maximum rate of 35 percent – a higher exemption and far lower rate than many Democrats wanted.
But the NY Times article also cautioned that the deal is not supported by all parties. So resolution may be within sight, but it is not yet a finalized deal.
“The House Democrats have not signed off on any deal,” Representative Chris Van Hollen of Maryland, who has been representing House Democrats in formal negotiations on the tax issue, said Monday night. “We will thoroughly review and discuss the proposed package in the caucus.”
Some senior Democrats said an agreement by Mr. Obama to accede to Republican demands on the estate tax could lead to a revolt among lawmakers.
With this positive news in the air, it may be time to schedule a meeting to adjust your estate plans to maximize the impact of this likely change in the federal estate tax law. Call me for an appointment, or leave a comment with a question below.