Andrew Bolton at the Hill has an excellent article on the status of the negotiations among the Republicans and Democrats in Congress along with President Obama. He actually views the estate tax as a key in the negotiations. See http://thehill.com/homenews/news/274721-estate-tax-could-be-key-to-fiscal-cliff-deal
Bolton reports that it appears the Republicans might accept the cut off for extension of the Bush income tax cuts at $500,000 if the present (as of 2012) law on the estate tax is continued. The current law is $5,120,000 exemptions (estate, gift and GS tax) with a 35 percent top rate. He on the other hand reports the liberal Democrats would squawk about continuing such a generous level. However, he also points out many farm state Democratic lawmakers would favor high exemptions.
We shall see.
Estate Tax News Blog