Obama Tax Relief Act - Thursday, December 17, 2010

February 04, 2011


New federal estate tax laws for 2011 and 2012 extend the Bush tax cuts, and then some. Among other things, these new laws increase the exemption amounts to Five Million ($5,000,000.00) Dollars per testator, indexed for inflation, set the estate tax rate at 35% for amounts over the exemption amount, continue the step-up in basis upon death rules, and increase the gift tax exemption from One Million ($1,000,000.00) to Five Million ($5,000,000.00) Dollars. In addition, the estate tax exemption, to the extent not utilized, has been made portable to one's spouse. The generation skipping transfer tax has also been increased to Five Million ($5,000,000.00) Dollars. If all of that were not enough, one can now elect, instead, a Zero Percent (0%) tax rate for decedents passing in 2010. While this is not intended as tax advice, it is intended to prompt the reader to consult with a tax professional to see if these generous tax allowances can be utilized while they are still available. The present rules sunset or revert to the pre-Act One Million ($1,000,000.00) Dollar limits in 2013, unless further extended or modified.







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