By Matt Brown on
12/15/2010 11:47 AM
Title III of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 is titled as follows:
TEMPORARY ESTATE TAX RELIEF
That’s right. It’s temporary. Meaning more uncertainty. Great. Is estate and gift tax planning dead? To the contrary! The next two years will provide an enormous planning opportunity if the bill is passed.
The bill amazingly provides for a $5 Million gift tax exemption. No, that is not a typo. In the past, clients had to go to extreme measures to take advantage of the exemption amount as it increased above $1 Million: they had to die. Not surprisingly, no client has yet found that a viable planning technique.
As you probably know by now, House Democrats voted yesterday not to allow the bill to reach a floor vote, mostly based on the perceived give-away to the rich of the estate and gift tax relief provisions. It may be that, to satisfy House Democrats, the bill is amended to temporarily go back to a $3.5 Million exemption amount with a 45% rate of 2009.
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