Posted on June 7, 2011 by Greg Herman-Giddens

Congress Starts on Estate Tax Debate

The federal estate tax exemption is currently set at $5 million ($10 million for married couples), with a 35% rate.  This law is set to expire on December 31, 2012, with the exemption reverting to $1 million (and a 55% rate) on January 1, 2013.

This has made planing for those with assets of between $1 million and $5 million or so challenging, but I have been telling my clients that I believed that Congress would ultimately continue the $5 million exemption.  Congress is now beginning discussions on the future of the estate tax, and early indications are that a $5 million exemption would be acceptable to both parties.  Democrats, however, would like to see the rate increased to 45%.

 

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Rebecca - June 8, 2011 1:11 PM

Has there been any talk about what might happen with the GST exemption in 2013?

RESPONSE: Not that I'm aware of, but I think it will probably track the estate tax exemption.

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