Treasury Official: Estate Tax Choice May Be Offered for 2010
Assistant Secretary of the Treasury Michael Mundaca said that allowing the estates of people who died in 2010 to be taxed as if it was 2009 is “one of the options on the table” in talks between Congress and the Obama administration, according to a Dow Jones newswire story.
As the story notes, this would help some heirs who might have been exempt from the estate tax if the owner had died in 2009, but who now are facing capital gains taxes if they sell the inherited assets. While the no-estate-tax rule was great for some of the families of billionaires who passed this year, it has subjected more heirs of estates worth less than $3.5 million to higher taxes.
Why? Under 2009 estate tax rules, when heirs sold inherited assets, they owed capital gains taxes only on the appreciation of the asset between the dates it was inherited and when it was sold. Under 2010 estate tax rules, capital gains taxes apply to the full appreciation in value from the time it was acquired by the decedent.
While there are some limited exceptions, there are undoubtedly more people who would not have owed estate taxes under the 2009 rules who now face higher capital gains taxes under the 2010 rules.
Mundaca said that providing an option for 2010 heirs to revert to 2009 rules is one possibility lawmakers are looking at to fill the gap period. But, he said, “We have to work through all this stuff with Congress.”
If you have estate planning “stuff” you have to work through, contact our Jacksonville Florida estate planning law firm.
