1.) Estate tax currently affects decedent's estates that exceed a value of $675,000.
2.) The new law ultimately phases out the tax by the year 2010. The exemption amounts are as follows:
3.) Beginning in 2010 the top gift tax rate will be the top individual income tax rate as provided under the bill.
Changes To The Income Tax Basis Of Inherited Assets
After the repeal of the Estate and Generation-Skipping Transfer taxes, the present law rules providing for a fair market value (i.e., stepped-up) basis for property acquired from a decedent are repealed.
A modified carryover basis takes effect, which provides that recipients of property transferred at the decedent's death will receive a basis equal to the lesser of the adjusted basis of the decedent or the fair market value of the property on the date of the decedent's death.
For a more detailed summary of all the provisions contained in the conference agreement for H.R. 1836, the Economic Growth and Tax Relief Reconciliation Act of 2001, please visit www.house.gov/jct/ and access the document identified as JCX-50-01.