Whatever Happened to Death and Taxes?
Summers, Nick, Newsweek
Byline: Number 17, NYC and Nick Summers
I, John Q. Public, being of sound mind and body, do hereby make, publish, and declare the following facts about the 2010 estate-tax mess--a fiasco nine years in the making, irrelevant to all but a few, and one that imperils Benjamin Franklin's maxim about the two things certain in life:
FIRST: No one really thought the estate tax would die. Because of budget rules, the Tax Act of 2001--which steadily lowered the estate tax from 55 percent in 2001 all the way to zero in 2010--was always set to expire this year. That meant rates would automatically revert to 2001 levels next year. Everyone thought Congress would act in the interim to fix that jarring swing. Everyone was wrong.
SECOND: It's causing a mess. Affecting estates worth $3.5 million or more, the "death tax" applied to only 6,000 or so estates in 2009. This year everybody gets a pass. But a capital-gains tax can be triggered, affecting those inheriting more than $1.3 million--about 70,000 Americans, tax experts say. …