The Chestnut Blog

I wrote back in October that I just could not see our Congressional leaders in Washington D.C. allowing a “loophole” to remain in the current estate tax rules that are in effect. Specifically, the loophole that exists for the calendar year 2010 is that there is no estate tax for that year only. As I had indicated at that time, I just could not see the administration letting any potential tax dollars slipping away.

Sure enough the House of Representatives this week passed a permanent extension of the 2009 estate tax structure which would maintain a $3.5 million per person exemption and a 45% top rate for taxable estates. The bill will now need to go to the Senate where it will be interesting to see how it is handled given the full plate that exists there with  just the healthcare debate alone consuming what seems to be all available time. I don’t see Congress staying during their traditional holiday break, so that even puts on more of a squeeze for time. It will be interesting to watch that balancing act.

Assuming that there can be reconciliation between the House version of the bill and a Senate version I do expect that it will be passed if even at the “witching hour” for this congressional session. To be honest, I am happy to see that the exemption amount per person and the top rate to be imposed are at least being floated at the existing levels of the tax code. Given the fact that existing estate tax law would be following a sunset provision, reinstating an exemption amount of $1mm and a top rate of 55% in 2011 that was in effect back in 2001, would be a travesty.

We would also be able to move on with our estate planning that has been on the back burner, now having specific details and avoiding the speculation that limited the execution of precise planning. So let’s hope that our Congressional leaders can find the time to get this bill passed. As for the healthcare bill passing this year…….I wouldn’t bet on that one!