The Exuberant Accountant - Scott Heintzelman

This past week the House lawmakers approved the Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Bill of 2009.  The legislation would permanently extend the current exemption for estates up to $3.5 million per individual and $7 million for married couples and set a maximum rate of 45 percent on estates above this threshold.

Lawmakers are suggesting that the bill would provide certainty for businesses. In addition, the measure would repeal the enactment of carryover basis rules that would have required many heirs to pay additional taxes on built-in gains of property inherited starting in 2010. This bill simply continues present law at current rates and exemptions.

If you remember way back in 2001 as part of EGTRRA (Economic Growth and Tax Relief Reconciliation Act), the federal estate tax was set to repeal in 2010 (meaning if you died in 2010, your estate would pay no tax).  At that time all accountants and attorneys chuckled and said, “When pigs fly” will that ever happen. Well, with only a few weeks to spare, the house is closing that repeal.

Most experts believe this is not the last time we will hear about the estate tax.  Many believe that congress will review this again in 2010.  Do stay tuned.  With this change, now is an excellent time to review your estate plan, as change is coming.