Estate Tax News

May 2007


In 1998, all estates over $625,000 were subject to federal estate taxes at tax rates up to 55%. About 3% of Americans paid estate taxes.

In 2006-2008, all estates over $2 Million are subject to estate taxes of 45%. 

In 2009, all estates over $3.5 Million are subject to estate taxes of 45%. 

The higher exemptions from estate taxes end under current law on January 1, 2011, when all estates over $1 Million will again be subject to estate taxes at tax rates up to 55%.

Life insurance is included when the IRS calculates your gross estate by law. 

A 2/27/2006 study by resonsiblewealth.org estimated there would be 5,854 federal estate tax returns filed in 2009 the United States. This is 0.25% of those who die in 2009.

The same study estimated that in Michigan, 153 federal estate tax returns would be filed. This is 0.18% of those who die in Michigan in 2009.

The Congressional Budget Office assumes that the tax cuts will expire December 31, 2010 (Tax Notes (2007 TNT 65-24). 

Under PAYGO (pay as you go) adopted by Congress in 2007, any extension of tax cuts must be offset by either a reduction in expenses or an increase in revenue. 

I read this to mean that in 2010 the estate tax is likely to flashback to the law in effect in 2001 ($1Million / person exemption) and the only issue is which political party will be successful in blaming the other for the flashback.