• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint
Share this Page URL
Help

Estate Taxes

Estate taxes are still a concern of many senior citizens. Congress’ attempt at estate tax reform has done little to clarify the situation. With all due respect to George Gershwin, I refer to the Economic Growth and Tax Relief Reconciliation Act of 2001, which purported to gradually eliminate the estate tax, as the “Ain’t Necessarily So Act”: The law gradually raises the amount that can be passed on without being subject to federal estate taxes to $3.5 million in the year 2009 and then actually abolishes the estate tax in 2010. But the elimination of the federal estate tax is limited to just that one year. After that time, Congress, like the dealer at a blackjack table, in effect says, “No further bets,” and the federal estate tax returns with the same reduced exemption level of $1 million from 10 years earlier.

Think about it. Under the present law, a person with an estate of $2 million who dies on December 31, 2010, at 11:59 p.m. will not pay a penny of federal estate tax, but if that person lives two minutes later and dies on January 1, 2011, at 12:01 a.m., a million dollars of his or her estate will be taxed at a rate of 39%. If that seems illogical to you, you must remember that this is Congress we are talking about. Congress and logic rarely belong in the same sentence.


PREVIEW

                                                                          

Not a subscriber?

Start A Free Trial


  
  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint