Estate Tax Reinstated

The 2010 Tax Relief Act reinstated the estate tax for deaths on or after January 1, 2010, and before January 1, 2013. Under this new law, the maximum estate tax rate is 35%, with an exclusion amount of $5 million.

 The executors of decedents who passed away in 2010 may elect the reinstated estate tax option or the no estate tax, carryover basis / limited step-up basis provisions.

 For estates under $5 million in taxable value, executors will probably choose the estate tax option with a $5 million applicable exclusion and the full step-up in basis.  These estates will pay no estate tax and the heirs will inherit the assets at fair market value. 

For very large estates, the election to apply the no estate tax and carryover basis provisions as if the 2010 Tax Relief Act was never enacted will probably render the most savings.  These large estates will not pay estate tax but will have a step-up basis limited to $1.3 million for non-spouse heirs, and an additional $3 million for surviving spouses.

For mid-sized estates (estates between $5 million and $10 million) the analysis will be more complicated.  Executors will need to take into account many factors to determine whether it is better to pay estate tax in 2010 or inherit most assets with carryover basis. 

See your tax professional if you have lost a loved one in 2010.

Comments are closed.


It's Your Money, Not Theirs

Latest Show

April 21, 2013–Richard and Joe discuss the more than 800 celebrity interviews and his techniques with Entertainment Reporter, Fred Saxon.

Featuring Polito Eppich

December 16, 2012–Richard and Joe welcomed Don Eppich of Polito Eppich. (Commercial free. 42 minutes.)

August 19th, 2012–Richard and Joe discuss tax policy and accounting services with Paul Polito, CPA and Don Eppich, CPA.

March 25th, 2012-Richard and Joe discuss the best accounting practices and strategic advice for businesses with Paul Polito, CPA and Don Eppich, CPA of