Presently, the unified credit is scheduled to shelter $3.5 million in assets per person in 2009. In 2010, there is no estate tax. In 2011, the unified credit is scheduled to return to $1 million.
What can we expect of President-Elect Obama? Of course, its too soon to tell, but his campaign promise was to make permanent the 2009 rates and credit - a $3.5 million unified credit equivalent and a 45% maximum estate tax rate.
An interesting question that has received very little attention is whether legislative changes in this area will repeal the scheduled elimination of the step-up in basis provisions (which provisions adjust the basis of assets of a decedent to the estate tax values). This elimination is scheduled to begin in 2010, although some step-up is allowed for in smaller estates.
Not allowing for a basis step-up will create a bookeeping nightmare for taxpayers, who will have to somehow figure out for inherited property what the decedent paid for the property and what basis adjustments may have occurred during the decedent’s lifetime. Let’s keep our fingers crossed that Congress will repeal the elimination as part of the expected revisions to estate and gift taxes.
What can we expect of President-Elect Obama? Of course, its too soon to tell, but his campaign promise was to make permanent the 2009 rates and credit - a $3.5 million unified credit equivalent and a 45% maximum estate tax rate.
An interesting question that has received very little attention is whether legislative changes in this area will repeal the scheduled elimination of the step-up in basis provisions (which provisions adjust the basis of assets of a decedent to the estate tax values). This elimination is scheduled to begin in 2010, although some step-up is allowed for in smaller estates.
Not allowing for a basis step-up will create a bookeeping nightmare for taxpayers, who will have to somehow figure out for inherited property what the decedent paid for the property and what basis adjustments may have occurred during the decedent’s lifetime. Let’s keep our fingers crossed that Congress will repeal the elimination as part of the expected revisions to estate and gift taxes.
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