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The Bloomberg BNA Estate Tax Blog is a forum for practitioners and Bloomberg BNA editors to share ideas, raise issues, and network with colleagues. The ideas presented here are those of individuals and Bloomberg BNA bears no responsibility for the appropriateness or accuracy of the communications between group members.

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Friday, June 3, 2011

Senate Approves Tax Bill, Action Now Moves to House

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On December 15, the Senate by a lopsided 81-19 vote approved the Tax Relief Act of 2010, which includes a two-year extension of the estate tax. Key estate and gift tax elements of the bill include the following:

  • a $5.0 million estate tax exemption and a 35% tax rate, effective in 2011 and 2012
  • the $5.0 million exemption is portable between spouses during 2011 and 2012
  • estates of decedents dying in 2010 may elect between: (i) no estate tax and a carryover basis regime or (ii) an estate tax with a $5.0 million exemption and 35% rate
  • for estates of decedents dying in 2010 and before the date of enactment, there is an additional nine months in which to: (i) file an estate tax return, (ii) make estate tax payments, and (iii) make qualified disclaimers of property passing by reason of the decedent's death
  • an additional nine months is granted to file a return and make elections for any generation-skipping transfers during 2010 and before the date of enactment
  • the gift tax is reunified with the estate tax in 2011 and 2012, with a $5.0 million exemption and 35% tax rate
  • the GST tax is reinstated for 2010, at a 0% tax rate.

Action now moves to the House of Representatives, where a significant faction within the Democratic caucus is opposed to the estate tax provisions of the bill. A vote is expected there today or tomorrow.

Harold W. Pskowski, Managing Editor for Estates, Gifts and Trusts

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