The impact of the 2010 Tax Relief Act
Posted by: Abby Meares
January 28, 2011
Topic: Estate Planning
Melanie Farr and Stephen Lewis explain the 2010 Tax Relief Act's impact on estate taxes
On December 17, President Obama signed "The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010," which is more commonly known as "The 2010 Tax Relief Act."
The Act prevented the return of the 2001 federal estate tax exemptions and rates. However, many of the provisions in the act will expire at the end of 2012.
The Act increased the exemption amount to $5 million for estate, gift and generation skipping transfer (or GST) taxes for deaths that occur in 2011 and 2012. The maximum tax rates for estate, gift and GST taxes were also reduced to 35 percent for those two years. The Act re-unifies the gift and estate tax exemption amount and revives the rule that property inherited at death will have a step-up in the basis.
If a person died in 2010, the Act allows for an election to have the new rules apply or to have no estate tax liability and to use the modified basis rules.
The Act also permits a transfer of any unused portions of the estate and gift tax exemptions between spouses. This means that any amount not used at the death of the first spouse can be added to the surviving spouse's exemption at his or her death.
With the new changes in the federal estate and gift tax laws, as well as the normal matters of Indiana inheritance tax and probate, this is a great time to review your estate plan or to begin working on one.
To begin working on your estate plan or to review your current estate plan, contact Haller & Colvin attorneys Stephen Lewis or Melanie Farr, or one of our other estate law attorneys.
The contents of this blog post are intended for general information purposes only and should not be construed as legal advice.
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