Tuesday, September 14, 2010

A new choice

Per Tax Notes, the Obama Administration is considering a proposal to give 2010 decedent's estates the choice of opting for the 2009 estate tax law, with a $3.5 million exemption and full basis stepup, or the 2010 law, with no estate tax but only a $1.3 million basis step up.

I'm not sure what the point is.  Yes, it passes constitutional muster. No, large estates are unlikely to choose a 45% estate tax over a 15% or even 20% capital gains tax.  This seems to be simply a way to let estates under $3.5 million off the income tax hook. It can't possibly be scored to raise any revenue, taxpayers are not quite that stupid.

I guess it would increase billings for estate planners, though.

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