The Estate Tax

The Wall Street Journal reported this morning that Democratic leaders in Congress expect to introduce legislation continuing the Estate Tax in 2010. Under current law the Estate Tax is scheduled to disappear in 2010 but reappear in 2011 at the old rate of 55% with a $1 million exemption. In 2009 the Estate Tax is 45% with a $3.5 million exemption. (Note that the exemption mentioned above is the lifetime Estate Tax exemption. Gift Tax returns are figured into this exemption.)

President-Elect Obama pledged to keep the Estate Tax at its current level ($3.5 million exemption with a 45% tax rate). I expect such a measure would pass Congress.

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