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April 28, 2009

Congress Moves Toward a Vote to Keep Estate Tax at Current Levels

Members of a House and Senate negotiating committee have worked out a budget outline that would permanently keep the estate tax at levels that are already in effect this year. That’s the approach charities have been seeking, because they said that will help them appeal to donors.

Members of the full House and Senate are expected to vote on the budget blueprint on Wednesday.

In 2001, Congress passed the current estate-tax law, which gradually phases out the tax through 2009 and repeals it for 2010. In 2011, however, the current law is set to expire and estate-tax levels that applied years earlier go back into effect unless Congress takes action.

The House had passed a budget outline that would keep the estate tax at 2009 levels and do away with the 2010 repeal. Heirs could exempt $3.5-million from taxes ($7-million for couples), with amounts above that taxed at 45 percent.

But a budget outline passed by the Senate would have cut the estate tax, a move that alarmed many charitable organizations. The Senate would have raised the exemption for individuals to $5-million ($10-million for couples) and lowered the tax rate to 35 percent.

A House-Senate conference committee that met to work out differences between the two budget outlines settled on the House version of the estate-tax provision.

— Grant Williams

Tuesday April 28, 2009 | Permalink

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