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Wednesday, June 4, 2008

Federal Estate Tax Reform - Not Happening Any Time Soon

For a while now, I have been telling my clients (and really anyone who asked) that I did not think there was going to be any major change in the Federal Estate Tax regime until after the presidential election. A recent Wall Street Journal article that I read is in line with this thinking. For the complete article written by Tom Herman, goto: What Congress Is Likely To Do to Your Tax Bill.

Under the current federal estate tax laws, a person is allowed to pass on up to $2,000,000 to anyone they choose plus an unlimited amount to a surviving spouse (as long as he or she is a citizen). In 2009, this "exemption amount" is supposed to go up to $3,500,000 per person. In 2010, the federal estate tax is theoretically supposed to disappear, and in 2011, it goes back to the pre-Bush era exemption amount of $1,000,000.

In all likelihood, no one in their right mind will support any exemption amount of less than $2,000,000. In my personal opinion, the exemption amount will settle somewhere between $3,500,000 and $5,000,000 for the years 2010 forward.

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