Thursday, January 13, 2011

Estate Tax Laws Extended

Its been awhile since my last post, since then, the Bush tax cuts have been extended for the next 2 years.
There is a 2 year change of the estate tax rate starting Jan 1, 2011. There is now a $5 million dollar exemption per person, ($10 million dollars for spousal couples), and a 35%tax rate rate. As of Jan. 1, 2011, the rates were supposed to revert back to $1 million dollars per person ($2 million dollars per spousal couples) at a 55% federal tax rate.
What this means: a un-married person may leave up to $5 million dollars worth of assets to a beneficiary without Federal estate tax. Everything over $5 million dollars is taxed at a 35% Federal estate tax rate.
A married couple may leave $10 million dollars in assets and not realize and Federal estate tax. Everything over $10 million dollars is taxed at a 35% Federal estate tax rate.

This is an improvement over the 2009 rates that were $3.5 million and a 45% federal estate tax rate.

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