Senate Republicans Propose Estate Tax Reform

On September 13, 2010, Senate Republicans introduced the "Tax Hike Prevention Act of 2010" which outlines the Republican position on several key tax issues facing the country during this election cycle.

The legislation would freeze income tax rates and capital gains rates at current levels. The legislation would also increase Alternative Minimum Tax exemption levels, and avoid the return of the "marriage penalty".

The Tax Hike Prevent Act of 2010 also addresses the federal estate tax, which is scheduled to return in 2011. The proposed legislation would re-unify the Gift Tax with the Estate Tax, and raise the exemption equivalency amount to $5 million per person. This $5 million exemption equivalency would also be indexed for inflation. The proposed legislation would also cap estate tax rates at a maximum of 35% and permit a "step up" in basis for inherited assets.

The proposed legislation would make estate tax law changes retroactive to January 1, 2010.

Although it is impossible to predict how politics will alter any final legislation adopted by Congress, Senate Republicans made a strong statement on tax policy with the Tax Hike Prevention Act of 2010.

If you have questions about the estate tax or "Tax Hike Prevention Act of 2010", please contact your regular Friedman Schuman contact or any member of the Estate Planning and Wealth Preservation group, whose names and contact information are provided below:

David Applebaum215-690-3805dapplebaum@fsalaw.com
Robert A. Bacine215-690-3803rabacine@fsalaw.com
Jeffrey R. Hoffmann215-690-3806jhoffmann@fsalaw.com
Amy C. Quigg215-690-3822aquigg@fsalaw.com
Marjorie J. Scharpf215-690-3818mscharpf@fsalaw.com