On the 13th, the “Tax Hike Prevention Act of 2010,” was introduced by a substantial group of leading Republican Senators, including Senator McConnell (R-Ky.) for himself, and Senators Grassley (R-Ia.), Kyl (R-Az.), McCain (R-Az.), Cochran (R-Ms.), Graham (R-S.C.), Roberts (R-Kan.), Cornyn (R-Tx.), Inhoffe (R-Ok.), Ensign (R-Nev.), Isakson (R-Ga.), Brownback (R-Kan.), Enzi (R-Wy.), Crapo (R-Id.), Burr (R-N.C.), Vitter (R-La.), Wicker (R-Ms.), Chambliss (R-Ga.), Bond (R-Mo.), Hutchison (R-Tx.), Hatch (R-Ut.), Bennett (R-Ut.), Risch (R-Id.), and Shelby (R-Al.). This bill, if enacted, would retroactively raise the estate tax applicable exclusion amount and GST exemption to $5 million, repeal the carryover basis rules, reunify the estate and gift tax exemptions, reduce the top estate and gift tax rate (and the sole GST tax rate) to 35%, permit a surviving spouse to take advantage of the unused applicable exclusion amount of the first spouse to die, and allow the executors of estates of decedents who die in 2010 to elect whether to be taxed under this new regime or under the present 2010 rules.
Clearly, this is a political ploy for post election negotiations, but represents a much more realistic approach from Senators who previously and consistently voted against any estate tax exemptions of less than $10 million. This could mean that there is some hope for action late this year, but only a slim hope, by most reckoning. The Will Doctor