Sunset of Estate Tax in 2010 Looking Less Likely

Sunset of Estate Tax in 2010 Looking Less Likely

Planning to die to in 2010 to avoid federal estate taxes? Think again. Rep. Steny Hoyer (D-Md.), the Majority Leader of the U.S. House of Representatives, said this week that the House will revise the estate tax — or inheritance tax — before it expires at the end of 2009 to go away in 2010.

“I expect it to come forward this year, whether it comes in the next two weeks or the next six weeks, I expect the estate tax to move in the House of Representatives,” Hoyer said at a news conference.

Abolition of the estate tax, or Death Tax as it is sometimes known, has been a focus of dealer and small business organization advocacy for a number of years. It was set to disappear for one year at the end of 2009 as part of the Economic Recovery Act, provided there was no congressional action to prevent it; Rep. Hoyers announcement seems to have snuffed out that possibility.

The current policy exempts the first $3.5 million in an individual’s estate, with a maximum tax of 45 percent on property after that.

After 2010, the tax is scheduled to revert to pre-2001 levels exempting $1 million in property, with a maximum rate of 50%, but the Obama administration has already proposed a budget wherein the estate tax exemption will rise to $7 million for a married couple ($3.5 million for a single taxpayer) and a maximum rate of 45% on property after that.