Estate Tax Changes Passed For 2011
As we watch the countdown on New Year's Eve it is a heady time indeed. Another year beckons, full of
change and pregnant with possibility. Before you know it, that fateful time arrives and champagne
corks take flight, people break into heartfelt song, and anything seems possible. But when you wake up
the next morning and make it to work a day or two later, you tend to find the world looking pretty
much the same as it did before all of that change that went down on New Year's Eve.
Though the above scenario is pretty accurate most of the time, the transition between 2010 and 2011 is
indeed relevant in the sphere of estate planning. As you are probably aware the estate tax was repealed
for the 2010 calendar year because of a provision in the Economic Growth and Tax Relief
Reconciliation Act of 2001 (commonly referred to as the “Bush tax cuts”). But the federal levy that
many derisively like to refer to as the death tax was scheduled to return in 2011 with a low $1 million
exclusion and a top rate of any eye-popping 55%.
The Bush era tax cuts were scheduled to expire at the end of 2010. Throughout the year there were
discussions among lawmakers on Capitol Hill about extending the cuts and providing some estate tax
relief. A bill finally made it through Congress that would extend the Bush tax cuts, reduce the Social
Security payroll tax, and revise the estate tax parameters.
It was signed into law by the president on December 17th, and we now have some more favorable
numbers to work with. The estate tax exclusion has been raised to $5 million for individual taxpayers
and $10 million for married couples, and the top rate has been reduced to 35%. These parameters will
remain in effect through 2012, so we can look forward to another round of wrangling in another 18
months or so.
Experienced estate planning attorneys Garden City NY of the Law Offices of Saul Kobrick P.C. offers
estate planning and business planning resources to residents of Garden City NY. To learn more about
these free resources, please visit http://www.kobricklaw.com today.