In a startling display of Congressional ineptitude, Congress allowed the estate tax to expire as of January 1, 2010. Before the trust fund babies trade in their Porches for Lamborghinis, realize that Congress may successfully enact an estate tax for 2010, and make it retroactive to January 1, 2010. Although such retroactivity is likely to pass scrutiny, the results of any court test are not likely to be resolved for years. Here's why:
The Congressional Budget Office has just released an Issue Brief on Federal Estate and Gift Taxes, setting forth the revenue that the estate and gift tax raises, how such revenue is affected by the various proposals for estate and gift tax reform, and a detailed explanation of the various reform proposals.
We are often asked whether Florida imposes an inheritance tax or estate tax on the estates of deceased persons. Thankfully, there is no Florida inheritance or estate tax.
Recent attempts to fix the impending repeal of the estate tax and subsequent re-enactment at higher rates have been reported by the New York Times, in Carl Hulse's article, Estate Tax Is Expiring, but Death Won’t Last.
Under the Economic Growth and Tax Relief Reconciliation Act of 2001(EGTRA), the estate tax rates and exemption amounts have been sliding lower, from a top rate of 55% and an exemption amount of $1 million in 2001, down to a top rate of 45% and an exemption of $3.5 million in 2009. This change has reduced the number of taxable estates by 90%, some commentators have estimated.