Wednesday, December 15, 2010

Can It Be True? Real Estate Tax Reform? Maybe So!

Are we on the cusp of the dawning of a new age in estate planning? Perhaps.

On December 15, 2010, the U.S. Senate passed by more than 80 votes a tax compromise reached between President Obama and Congressional Republicans. Among other tax issues, the bill continues for two more years the income tax structure that was due to expire on December 31st.

Also, the bill ushers, potentially, a new age in estate planning. The bill would make the exemption against the federal death tax $5 million (up to $10 million for married couples) and make the death tax rate 35%. This would be in lieu of an absurdly low exemption of only $1 million and a 55% rate under present law.

However, the bill has not passed the House of Representatives and several members of that House have threatened to torpedo the bill. That threat is mostly empty since it is being made by Representatives who were voted out of office in the last election.

So stay tuned, it is now up to the House to see if we will get real estate tax reform.

Bernie Greenberg

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