all been reading about estate taxes lately. On January 1, 2011, the Bush tax
cuts will expire so we'll be back to the pre-2001 system unless Congress gets
their act together soon.
your clients might not realize, and what Ashlea Ebeling talks about in her
recent Forbes.com blog post (http://blogs.forbes.com/ashleaebeling/2010/10/20/a-60-estate-tax-rate-could-be-around-the-corner),
is that for estates between $10 million and $17,184 million, a federal surtax
of 5 percent will be added to their 55 percent estate tax rate for a total of
A 5% federal surtax, in
addition to the 55% rate, applies to estates with assets between $10 million
and $17.184 million. The surtax (for estates that pay all of it) wipes out the
benefit of both the lower marginal rates applicable to the first $3 million of
an estate's assets and the $1 million exemption. In other words, the surtax
makes the effective rate 55% on the first $17.184 million of the estate-if your
estate is that large or larger. Once the estate is over $17.184 million, the
surtax disappears and the nominal top rate is 55% again.
for estates over $10 million who will be taxed at the 2001 level of 55 percent,
the added surtax will make those estates the most highly taxed instead of the
estates worth more than $17.184 million.
The surtax was repealed by the Bush cuts, but it returns along with the
rest of the cuts unless Congress decides to pass something quickly at the end
of the year.
. . . .
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