Update: Estate Tax

Perhaps Congress is finally getting close to legislation and a decision on Estate Tax.  The Hill is reporting Estate Tax legislation may be included in a bill dealing with the extension or partial extension of the Bush tax cuts.  The comments on the combined legislation came from a spokesman to Senate Majority lead Harry Reid, so it does appear legislation may be close.

Expectations are for an exemption of $3.5 million and a tax rate in the 35% - 45% range.  No word on if the bill would be retro-active.  This is similar news to what has been proposed in past months, and nothing has come to fruition, but what makes this interesting and perhaps credible is the statement from Reid's office that it is being considered.

Other news outlets report there will not be a vote on the Bush tax cuts until after the November elections, so we may have to wait until the very end of the year before we know if anything on estate tax legislation will happen or what exemption and rates may be.

I will keep AW Blog readers posted as I get additional news.

The Hill reports

Senate Finance Chairman Max Baucus (D-Mont.) has taken the lead in crafting an extension of the Bush tax cuts. But with gridlock in the Senate and 2010 whittling down to just a few months, Baucus could use the Bush tax bill as a vehicle to move other tax priorities.

"We don't have multiple bites at the apple," the spokesman said, adding, "[Baucus] could include other stuff [with the Bush tax cuts], including the estate tax,"

Absent congressional action before next year, the estate tax reverts to pre-2001 levels that slapped a tax as high as 55 percent on inheritances worth more than $1 million.

Baucus last week said he would like the estate tax to return to 2009 levels, which levied a 45 percent tax on estates worth more than $3.5 million, but he didn't rule out going lower on the rate.

He said a 35 percent estate-tax rate was in the ballpark, but not near home plate.

"That's in the outfield," he said. "It's still in the park, but it's getting close to the exit. But it is in the ballpark."

To read the full Hill article, click HERE.