On Thursday, December 3, 2009, the U.S. House of Representatives passed HR 4154, which essentially extends the 2009 gift and estate tax exclusions and rates indefinitely. The “applicable exclusion” for the federal gift tax will remain at $1 million, and the “applicable exclusion” for the federal estate tax will remain at $3.5 million. The act cancels the repeal of the estate tax scheduled for 2010 and the reversion to pre-2001 tax law scheduled for 2011, as well as the carryover basis rules for capital gain tax purposes. For the full text of the act, click here.
The Senate is considering its own version of a tax-extension bill, and then the two bills will have to be reconciled in conference. Thus, it remains to be seen what will actually get to the President’s desk.