I don’t think anyone missed it in 2010, but it is back anyways or at least it will be upon final signing of the President today. The Estate Tax is back in 2011, but we have the good fortune (if there is such a thing in taxation) of having Congress agree and pass legislation which will actually improve the taxation of most estates going into 2011 and 2012.
Why just those two years? Well, the law only extends the income tax, capital gains tax and the estate tax limits until 2012. Coincidence? Not really. Time for another election in 2012 so they can battle out what taxes, including the estate should remain and which should be changed.
Here are the estate tax details:
Estate tax is back, but at a $5 million exclusion amount and 35% tax rate for each dollar over the exclusion. The exclusion amount can be doubled up so that if married each spouse will receive $5 million and it is portable.
Although the change is short-term it allows the benefit of looking out 2 years and updating planning accordingly.
At least most people can enjoy New Year’s Eve now without worry about what a $1 million exclusion would do to their estates.