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Any tax information or written tax advice contained herein (including any attachments) is not intended to be and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer. (The foregoing legend has been affixed pursuant to the U.S. Treasury Regulations governing tax practice.)
The matters highlighted on this website are presented in general terms and cannot be applied without consideration of all circumstances. NSBN will provide additional details upon request and will be pleased to discuss with our clients or their attorneys the possible effects of these matters in specific situations.
Email Alert
Effort to Extend Estate Tax Fails
December 22, 2009
The federal estate tax will likely expire on December 31, 2009 as scheduled. Congress' last-ditch effort to pass a short-term extension of the estate tax as it currently exists in 2009 was unsuccessful. However, lawmakers said they would revisit the tax early in 2010 and possibly approve retroactive provisions. This situation has created significant uncertainty among taxpayers regarding which estate planning options to pursue.
In addition to the expiration of the estate tax, the step-up in basis rules are also set to expire on December 31, 2009. Consequently, those who inherit property from a decedent in 2010 and then sell it could find themselves paying higher capital gains taxes, even though there is no estate tax. This is because the 2010 rules provide that they will have to figure their gain based on the price the decedent originally paid for the asset, instead of the value at the time the asset was transferred from the estate.
We will keep you updated regarding any changes in the estate tax law. If you have any questions regarding the estate tax provisions or estate planning, please contact us as soon as possible.
