As discussed in a previous article “Federal Estate Tax Changes Loom,” at www.WealthManagerWeb.com on Nov. 17, there has been movement by both the House and the Senate to finalize some type of solution to pending elimination of estate and gift tax on Jan. 1, 2010. Two new Bills have materialized recently; S. 2784 was introduced in the Senate and H.R. 4154 was introduced and recently passed in the House. Although these actions are a step in the right direction, they really don’t help us predict either the short-term or long-term outcome of this legislative process.
Senate Bill S.2784
1. Maintains the $3.5 million federal estate tax exemption in 2010, adding an inflation index adjustment going forward,
2. maintains a top estate tax rate of 45%,
3. unifies the gift tax and estate tax exemption, and
4. offers “portability” of federal estate tax exemption between spouses.