2010 & the Estate Tax: An Eerie Year?

Enero 05, 2010

Original publication: Agence France Presse (AFP)

Date of publication: January 5, 2010

"America's millionaires and billionaires can die now, and not pay later under a quirk in the US estate tax law that Congress failed to act on in 2009.

The inheritance tax, which critics deride as a "death tax," officially expired on December 31 for those who pass away in 2010. But a stiff tax will come back for anyone who survives into 2011.

This bizarre scenario results from a law enacted in 2001 under president George W. Bush, which gradually phased out the estate tax by increasing the exemption to 3.5 million dollars in 2009, and eliminated the tax entirely in 2010.

For budget reasons, the law had a "sunset" provision that meant it would expire and the tax would return in 2011 at the pre-enactment levels of 55 percent of any inheritance amounts above one million dollars. [...]

[T]he Wall Street Journal reported that some wealthy Americans were kept on life support through the end of 2009, while others were considering a trip to the Netherlands in 2010 to take advantage of an assisted suicide law for terminally ill patients, with the tax loophole in mind.

Lee Farris, an estate tax specialist at United for a Fair Economy, which supports reinstatement of the inheritance tax, said the current situation is unfortunate.

'I think people should make life and death plans on what's best for that person and not on tax law,' she said.
'People are very upset that Congress has not taken care of this. They've had eight years of notice.'

Farris said that Congress is likely to enact a law retroactive to January 1, 2010, but that may be tested in the courts."

Read the full article by Rob Lever (Agence France Presse).

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