House Speaker Nancy Pelosi as reported in an article at The Hill by Jay Heflin states that her Congress has or will cut taxes by $800 billion. She includes in that tally “permanent estate tax relief” that is “making its way through Congress.” Mr. Heflin assumes that means extension of the 2009 estate tax regime. That would mean she will push for a $3.5 million estate tax exemption with a 45 percent top rate along with a step up in income tax basis. She does not say whether she intends to push for a retroactive reinstatement of the 2009 law back to January 1st of this year, or the resurrection of such rules instead of the $1 million exemption and 55 percent top rate that will otherwise go into effect on January 1, 2011. There has been some talk in Congress of passing legislation that will give the estates of those dying this year the option of selecting the law that will apply: no estate tax but no step in income tax basis or $3.5 million exemption with the step up.
Please note, however, this is all still just talk. She may say estate tax legislation is “making its way” but there is no real action on the estate tax going on in Congress at the moment. And many of the informed are now saying nothing will happen until after the November election.
The press release of Speaker Pelosi is at http://www.speaker.gov/newsroom/reports?id=0342.