The House of Representatives passed on December 3 by a vote of 225-200 an estate tax bill, H.R. 4154, the Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009.
The bill would extend the 2009 estate tax level to 2010 and make permanent the estate tax at a $3.5 million level for an individual and $7 million level exemption for couples and impose a 45% maximum tax rate. The bill now moves to the Senate. Congress must do something before year-end or there will be no estate tax in 2010. A spokesperson for Senator Max Baucus, chairman of the Senate Finance Committee, says that Baucus “recognizes the estate tax is a must-do” and that he aims to act “before year’s end.”
Writing at WealthManagerWeb.com, John Bock, a senior VP at Key Private Bank, notes that the Senate version of the bill, S.2784, maintains the $3.5 million federal estate tax exemption in 2010, adding an inflation index adjustment going forward; would keep a top estate tax rate of 45%; and would offer “portability” of federal estate tax exemption between spouses. However, Bock believes that “the odds still seem to be favoring an extension of the current law.