House Extends Current Estate Tax Rules to 2010 and Beyond
The House on December 3, 2009 passed the Permanent Estate Tax Relief for Families, Farmers and Small Businesses Bill of 2009. The Act would permanently extend the current exemption of estates of up to $3.5 million for a single taxpayer and $7.0 million for married couples. For estates larger than there amounts, they would be taxed at the current 45% top rate.
As the title suggests, the House is trying to provide relief to Families, Farmers and Small Businesses. Additionally, the bill repeals the enactment of carryover basis that was to start in 2011. This means that people inheriting assets will still be able to use the date of death values (like you can now), instead of using what the basis was for the person that died. This would probably led to an accounting nightmare. This bill simply continues the present 2009 law for rates and exemptions.
The negative is that the Bill does not increase the lifetime exemption amount for gifts. This is still limited to $1 million during life. It is unclear if the Senate will review this before year-end, so this Bill may not get passed until early 2010 and there may be some changes, but at least it has passed the house.
You should be reviewing your estate plan right now to make sure it is up to date, but with the current law and the proposed changes.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
Comments are closed.