Senate Budget Panel Votes to Procrastinate on Federal Estate Tax
As a result of a silly political game played by the U.S. Senate shortly after President George W. Bush took office, in 2009 there was no federal estate tax on the first $3,500,000 of a person’s net worth at death, and, right now, there is no federal estate tax if somebody dies, no matter how wealthy the person is, yet in 2011 the federal estate tax exemption goes all the way back down to $1,000,000. Over the past several months, the Senate has been the obstacle to stabilizing the estate tax, and apparently the Senate plans on continuing its silly political tax games. The Senate Budget Panel voted on April 22, 2010 to continue the federal estate tax uncertainty by extending the 2009 exemption of $3,500,000 through 2010 and 2011, and not making a permanent change. Presumably, if no further action gets completed, the federal estate tax exemption would drop down to $1,000,000 in 2013. http://www.reuters.com/article/idUSTRE63L5V420100422?feedType=RSS
In a joint letter dated April 15, 2010, the Chairs of the ABA Tax Section and the ABA Real Property, Trust and Estate Section had requested that the Senate Committee on Finance hold a hearing on federal wealth transfer taxation. Given the possibility that the federal estate, gift, generation-skipping transfer and adjusted basis tax laws may be repaired retroactive to the beginning of 2010, serious attention by the U.S. Senate is already long overdue.