Sunday, December 6, 2009

Estate Tax Could Stay

The House voted this past week to keep the estate tax in play and exempt couples with estates of up to $7 million. This could certainly keep most Americans from worrying about their heirs getting socked with yet another tax from Washington. Let’s see how fast the Senate acts. If they drag their feet, though, the estate tax would be replaced in 2010 by a capital gains tax on anything over $1.3 million. This means that if heirs sell inherited assets, including homes, stocks and collectibles, they’ll have to pay between 15% and 28% on any appreciation realized since the assets were acquired by the deceased. In other words, the step-up in basis would be lost and could cost your love ones a heap of money. So let’s hope the Senate moves quickly. Stay tuned. Best wishes, George

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