Senate Defers Estate Tax Repeal

Under current estate tax law, the “applicable exclusion” for estate taxes is $2 million in 2007 and 2008, increasing to $3.5 million in 2009.  In 2010, the estate tax would be repealed, but in 2011 it would reappear, reverting to a $1 million exclusion.  In its 2008 budget resolution, the U.S. Senate voted to extend the 2009 estate tax “applicable exclusion” of $3.5 million through 2012.  Action is required by the House of Representatives to effectuate this change.  Attempts were made to increase the exclusion to $5 million and to eliminate the tax altogether, but those efforts failed.

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