Kim Dixon at Reuters.com reports that House Ways and Means Chair Sander Levin anticipates reinstating the estate tax for 2010. The remarks were made at a seminar hosted by Reuters on financial regulation. I am not sure if they quoted Levin correctly but the following is the excerpt:
Another hot tax issue is the estate tax, which expired last year after lawmakers were unable to reach a deal to extend it. Levin said he expects to re-enact the tax retroactively at 2009 levels this year.
That would tax estates at a rate of 45 percent, after a $3.5 million exemption for individuals and $7 million for couples. Congress is compelled to act because if no action is taken, the rate jumps to 55 percent next year with a $1 million exemption amount.
Retroactive reinstatement of the estate tax would be pretty big news. Not sure if they quoted him correctly or not. Unlikely pure retroactive reinstatement will happen; most likely Republicans would block in the Senate. However, what may be possible would be to give estates the choice between the new law and the old law. There has been some talk of that. The reason would be to give smaller estates the ability to get a full step up in basis not limited by the present limits. A good advantage especially to the estate of the first spouse to pass away.
The article is found at http://www.reuters.com/article/idUSTRE63P5RL20100426