02 Aug Lame Duck till 2011?
People asking about what is going to happen in the tax world in 2011 may want to look to the history of Congress facing an election year. Many times, especially during the last few elections Congress has been noted as acting as a “lame duck” or basically doing nothing at all. This is due to campaigning time needed, not wanting to make controversial decisions and all sorts of other items which may impact their re-election chances.
So, the result is we may get no action on spending and taxation laws until the new Congress comes in next year. What this means is that the tax laws set to expire December 31, 2010 may just do that. Two of the biggest of these are low capital gains rates and the estate tax.
If January 1, 2011 occurs without Congress acting then we are looking at $1 million exemption. This means that every dollar over $1 million that your estate is worth will be taxed at 55%.
May be fine for those whose favorite charity is the IRS, but otherwise some estate tax planning may be necessary very soon.
Check out this article for more explanation: http://tinyurl.com/23oagav.