On a vote of 257 to 167, the House of Representatives passed the American Taxpayer Relief Act which returns the estate tax law to as it was in 2012. Technically the exemption had gone down to $1 million on January 1st and so this is a tax cut. However, just from a technical standpoint; the Act is retroactive.
The mainstream news media is stating the exemption has gone to $5 million but that is not correct. It is $5 million adjusted for inflation since 2010. I estimate the exemption will be around $5.2 million. We need to hear the calculation from the IRS. Its should come in the next few days.
The President has yet to sign the Act. Hence, we technically still have a $1 million exemption as I write this post.
We shall see.
Estate Tax News Blog