Friday, December 10, 2010

Mr. Reid Makes a Move (along with Mr. McConnell) on the Estate Tax

Just yesterday, our Senator from Nevada (who also happens to be the Senate Majority Leader), introduced legislation to extend the Bush Tax Cuts through 2012. The bill submitted by Mr. Reid, along with Senate Minority Leader Mitch McConnell, would provide, among other tax changes, the following:
  • The proposal would reunify the gift and estate tax exemptions at $5 million per person or $10 million per couple;

  • It would also set a $5 million generation-skipping transfer (GST) tax exemption going forward and zero percent rate for 2010;

  • The bill would decrease the top transfer tax rate to 35% for estate, gift and GST taxes beginning 2011;

  • While the proposed bill would be effective January 1, 2010, it would allow for an election to choose no estate tax and modified carryover basis for estates arising in 2010;

  • It would allow for portability of any unused exemption to a surviving spouse, based upon the election of the deceased spouse’s executor; and

  • It also appears to leave unchanged the laws relating to Grantor Retained Annuity Trusts and Valuation Discounting.

--Attorney David M. Grant

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