Last week several senators introduced a bill to continue last year’s estate tax provisions for this year and into the future, retroactive to January 1 of this year.
This bill would reinstate last year’s $3,500,000 per person exemption from the tax, and restore the 45% tax rate on amounts over that for estates up to 10 million. The tax rate increases for estates over 10 million, with an additional surtax on estates over 50 million. It would also reinstate the full step up in basis on appreciated assets held by a decedent. Although the different provisions for very large estates, result in a high tax for those decedents, if passed, the bill would be very good news for many estates that would otherwise be taxable next year with a scheduled $1,000,000 exemption and 55% tax on the excess.