A legislative battle is brewing regarding the future of the
federal estate tax, or "death tax," as it commonly is referred to
by its opponents. This battle's outcome could have significant
implications for many small- and medium-sized businesses.
In 2001, Congress passed legislation to phase out the estate tax
during a 10-year period. The tax has declined from its 2001 level
of a 55 percent rate with a $675,000 exemption to a 45 percent rate
with a $3.5 million exemption. On Jan. 1, 2010, the estate tax is
scheduled to decline to zero—but only for one year. The tax
is scheduled to revert to its 2001 level beginning Jan. 1,
It doesn't require much imagination to foresee the extreme
difficulties the uncertainty regarding the estate tax may create
for estate owners, their families and their businesses. If Congress
does nothing to address this issue, the estates of owners who die
during 2010 will have no estate tax liability whereas estates of
owners who die during or after 2011 will have substantial tax
liability that could ultimately force the sale of...
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