New Estate Tax Legislation Changes Playing Field & Provides Opportunities for Planners

Ever since the passage of EGTRRA in 2001, estate planners have had to deal with the uncertainty of a changing estate tax. The repeal of the estate tax in 2010 and its reintroduction in 2011 (with a smaller exemption and higher rates) had the effect of discouraging planners and their clients from engaging in long-term planning. On December 29 and again on January 6, leading estate tax authority Alan Gassman will facilitate a new BNA Tax & Accounting webinar, Estate Tax Law Changes in 2011, focusing on the opportunities offered for planners by recent changes enacted for 2011 and 2012.

“The recent passage of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 has changed the playing field, but with only a temporary two-year fix,” says BNA Tax & Accounting Managing Editor Harold Pskowski. “The Act has resolved the uncertainty for estates of decedents dying in 2010 by giving them a choice between no estate tax, but with carryover income tax basis, or the imposition of an estate tax with a $5.0 million exemption.”

The new $5.0 million exemption, together with a 35% tax rate, applies to estates of those dying in 2011 and 2012, as well as to gifts and generation-skipping transfers made in those years. Then, in 2013, the pre-EGTRRA law will return with a $1.0 million exclusion and a maximum 55% tax rate.