Estate, Gift and GST Tax Alert
December 10, 2010
The news media has widely reported the compromise on the extension of tax cuts that President Obama and the Republican Congressional leadership reached earlier this week. The proposed tax bill is primarily focused on the extension of the Bush-era income tax cuts that are scheduled to expire at the end of this year. However, the proposed compromise also includes estate, gift and generation-skipping tax provisions. The details are only now beginning to emerge, as the summary of the Senate bill was just released on Thursday night. The Senate bill includes some estate tax changes that we expected, but there are some surprises which could create significant year-end planning opportunities for 2010, particularly with respect to gifts to grandchildren. There will also be new planning opportunities for 2011, as the lifetime gift tax exemption would increase by 500% under the new legislation. Passage of the new tax bill in the Senate appears likely, but it is not clear whether the bill will gain the approval of a majority in the House of Representatives. We are watching the situation closely and hope to provide additional updates.