Is the Estate Tax Going to Be Repealed?
 
 
The short-term answer is “yes.” The Economic Growth and Tax Relief Reconciliation Act of 2001 made sweeping changes to the federal estate tax and eliminated the tax entirely in 2010.  
 
However, because the tax legislation is scheduled to expire after December 31, 2010, the federal estate tax will return to its original 55 percent maximum rate in 2011 unless Congress acts to make the repeal permanent.  
 
Estate taxes are levied by the federal government and several states on any property that passes from the dead to the living. All estate assets are subject to federal estate taxes. However, the applicable credit shelters a portion of an estate from federal estate taxes.  
 
The following table illustrates changes to the applicable credit and the top federal estate tax rate from 2002 through 2011.
 
 
Year
Applicable Credit
Top Estate Tax Rate
2002
$1 million
50%
2003
$1 million
49%
2004
$1.5 million
48%
2005
$1.5 million
47%
2006
$2 million
46%
2007
$2 million
45%
2008
$2 million
45%
2009
$3.5 million
45%
2010
Tax repealed
0%
2011
$1 million
55%
 

The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor.

 
This material was written and prepared by Emerald.
© 2010 Emerald

 
Hein Wealth & Tax Solutions
4600 Military Trail Suite 226 • Jupiter, FL • 33458
Phone: 561-249-1787 • Fax: 561-249-1786
www.heinwealth.com • stevenhein@heinwealth.com

 

 

Securities and Investment Advisory Services offered through NFP Securities, Inc. a Broker/Dealer, Member FINRA/SIPC and a Federally
Registered Investment Advisor.  NFP Securities, Inc. is not affiliated with Hein Wealth & Tax Solutions LLC.
 
NFP Securities, Inc., and Hein Wealth & Tax Solutions LLC, are not Certified Public Accounting (CPA) firms. Registered Persons must be properly licensed as Certified Public Accounts (CPAs) to practice such activities outside of their capacity as Registered Persons. 

This site is published for residents of the United States only.  Registered Representatives and Investment Advisor Representatives of NFP Securities, Inc. may only conduct business with residents of the states and jurisdictions in which they are properly registered.  Therefore, a response to a request for information may be delayed.  Not all of the products and services referenced on this site are available in every state and through every representative or advisor listed.  For additional information, please contact the NFP Securities, Inc. Compliance Department at 512-697-6000.