Tax Relief Act of 2010: Estate Tax
The Act makes major, though temporary, changes to the federal estate
tax. For 2011 and 2012, the estate tax exemption amount (the
applicable exclusion amount, renamed the basic exclusion amount)
will be $5 million per person (the $5 million will be indexed for
inflation in 2012); the top transfer tax rate for these years will
be 35%. The $5 million exemption amount and 35% top estate tax rate
will apply retroactively to 2010 as well, but for individuals who
died in 2010, an election can be made to choose the estate tax
provisions effective prior to this legislation (i.e., no estate tax
applies, but special modified carryover basis rules apply); an
extended due date is provided for individuals who died on or after
January 1, 2010, and before December 17, 2010. For 2011 and 2012,
when one spouse dies, any unused portion of that spouse's estate tax
exemption amount may be transferred to the surviving spouse.
|
Before
Act |
After
Act |
|
Top estate tax rate |
No
estate tax for 2010 (modified carryover basis rules
applied), estate tax would return in 2011 with top rate of
55% |
Estate
tax retroactively reinstated for 2010; top rate of 35%
applies to 2010, 2011, and 2012† |
|
Estate tax exemption equivalent amount (basic exclusion
amount, formerly called applicable exclusion amount) |
No
estate tax for 2010 (modified carryover basis rules
applied), estate tax would return in 2011 with $1 million
applicable exclusion amount |
$5
million basic exclusion amount applies to 2010, 2011, and
2012†; ($5 million amount will be indexed
for inflation in 2012) |
|
Portability of exemption amount |
N/A
|
For
2011 and 2012, when one spouse dies, any unused portion of
that spouse's estate tax exemption equivalent amount may be
transferred to the surviving spouse |
† For individuals who died in 2010, an election can
be made to choose the estate tax provisions in effect prior to the
Act.
See also:
Summary |
Tax Rates |
Estate Tax |
Gift and
Transfer Tax |
Business and
SE |
Tax Credits
|
Deductions |
Other
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