The estate tax changes date back to President Bushs tax cuts in 2001, is that right?
Yes. In 2001, Bush pushed through tax cuts that gradually ramped up the exemption threshold after which estate tax applies. Congress instituted a 10-year sunset provision to the legislation, with a suspension in 2010 and exemption levels reverting back to 2001 levels in 2011. The political gamesmanship was that once it’s repealed it was going to be very difficult to reinstate it. The Republicans don’t want an estate tax at all and the Democrats don’t want to be the ones accused of reinstating the “death tax,” but they may be willing to run out the clock until 2011. The really bad thing is that both of them are playing political games with people’s lives. What are the chances that the estate tax will be reinstated this year and perhaps made retroactive to Jan. 1, 2010? Typically, when you have an estate, you have nine months to file an estate tax return and the IRS has three years to evaluate the estate. So making it retroactive is a possibility and there could be all sorts of compromis
