The “state” of the Estate Tax is …
... in a state of confusion and that’s putting it mildly!
Originally, for those dying in 2010, there was no estate tax. Then Congress thought you might not be happy with this arrangement. So they created two methods of taxing estates and determining the basis of inherited assets (see our blog post entitled “Could you actually deduct more than you paid for an asset?”). You could have picked either method if you chose by mid-September of 2011. There was just one small problem. IRS hadn’t determined the method of selection by September 15, so the deadline was extended. Traditionally, couples would try to equalize the assets so as not to waste any of the estate exemption every US citizen is given. Now Congress has made the unused exemption “portable” (it can be used by the second to die), but only if you file an estate return to claim it. Thus, thousands who didn’t have to file may need to file an estate return to preserve the remaining spouse’s ability to utilize this new and, for the most part, unknown exemption..
At least one thing is crystal clear. The federal exemption for estate and taxable gifts is scheduled to drop 80% at the end of 2011. If you’ve ever thought about gifting to your children or other heirs — don’t hesitate any longer.
E-Mail us for specific advice on how to go about this.
He is also a founding Board Member and Finance Director of the Fayette Pregnancy Resource Center and serves on the Board of the National Equal Rights Institute.
Latest posts by David Conley (see all)
- Should you be paying “your fair share”:
We destroy another tax myth with facts- March 20, 2019
- Cliff notes of the new tax law:
Our cheat sheet guide to tax reform- March 16, 2019
- March madness-tax humor:
Bracket can be in the eye of the beholder- March 10, 2019