In early December, members of the House voted 220-200 to pass H.R. 4154, a bill that would make the 2009 45% estate tax rate and $3.5 million per person exemption permanent.
Introduced by Rep. Earl Pomeroy, D-N.D., the Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009 bill would maintain the so-called “step-up in basis” tax rules, which protect many heirs from paying additional capital gains taxes on inherited assets.
Observers expect the Senate to pass a measure that will merely extend the current rate on a temporary basis. The Senate probably will deal with the issue when it works on comprehensive tax reform legislation in 2010.
Under current law, the estate tax tax is set to expire in 2010, then return in 2011 with a 55% tax rate and a per-person exemption of just $1 million.