For all those expecting or maybe just hoping to see a break in the estate tax in 2010, the likelihood of a zero estate tax is lessening every day. All evidence points to an extension of the estate tax at 2009 levels. President Obama’s FY2010 budget assumes the estate tax will be kept at its current level.
The Budget Resolution Conference Agreement, filed April 27, 2009, also assumes the continuation of current estate tax rates. At the May 8, 2009 Estate and Gift Taxes session of the American Bar Association Section of Taxation meeting, an aide to Finance Committee member Charles E. Schumer, D-N.Y. indicated that while the Democrats would prefer a long-term reform of a variety of taxes, including the estate tax, a short-term patch seems to be the trend. Further, On May 11, 2009 the Treasury Department released the Green Book outlining some of the revenue-raising measures in the President’s budget. One such measure is designed to block estate tax avoidance practices.
While many may still be holding out for some sort of Congressional compromise which will retain the estate tax but allow for higher exemptions and/or lower rates, for the time being a last minute patch extending the estate tax at 2009 levels appears to be the most likely outcome.