Topics of Interest

The Federal Estate Tax Exemption Rises

On January 1, 2009, the Federal Estate Tax Exemption rose to $3.5 million per person. Every dollar in excess of $3.5 million will be taxed at a 45% rate. Pursuant to George W. Bush’s 2001 legislation, the Federal Estate Tax Exemption is scheduled to be eliminated for the year 2010 and reinstated on January 1, 2011 at $1 million with a maximum tax rate of 55%.

The general professional consensus is that legislation will soon be enacted to stay the Federal Estate Tax at $3.5 million. First, the Federal Estate Tax is a clear revenue-raising devise for a depressed Federal budget. Second, according to Congress’ Joint Committee on Taxation, the current estate tax will affect around 9,600 estates this year (approximately 0.39 percent of all deaths), raising more than $20 billion¹.

---

¹ Forman, John. Forman: The Death Tax Lives, 1.19.09 http://www.journalrecord.com/article.cfm?recid=95246