The NY Times reports this morning, from a well connected Democratic Senator (Pomeroy), that it appears likely that any extension (either permanent or temporary) of the current tax regime into 2010 will not happen this year, causing the “repeal” of estate tax to occur on Jan 1st in accordance with current law-replaced by an unworkable capital gains tax on inherited property.
The Will Doctor was heartened by the Senator’s certainty that next year your Congress will pass the permanent extension of the current estate tax system, retroactive from 1/1/2010. Planning is not as effective with an uncertain (and unworkable) tax environment-the threat of the return to a $1 million exemption is still real, if improbable. The “carryover basis” income tax on inherited property was proven as unworkable when they tried it in the seventies. We will stay tuned.