No estate tax this year

Well, so far at least. Congress let the estate tax lapse for 2010 meaning anyone lucky (unlucky? since you’re dead) enough to leave an estate this year will leave a larger estate since the Federal government isn’t taking its cut. Of course that might change in the future with some sort of retroactive tax. All in all it’s a confusing situation all around.

From the link:

More than a month into 2010, the Internal Revenue Service is not collecting estate tax on the money that wealthy people, including small business owners, leave to their heirs after they die. The unusual situation results because the U.S.Senate did not pass legislation late last year to remedy the scheduled expiration of the estate tax.The situation is confusing and unfair, and particularly hurts entrepreneurs doing succession planning, says Jonathan M.Bergman, a certified financial planner and vice-president of Palisades Hudson Financial Group, a fee-only financial planning firm in Scarsdale, N.Y. He spoke recently to Smart Answers columnist Karen E. Klein. Edited excerpts of their conversation follow.

Also from the link, here’s the bottom-line impact of this Congressional blunder:

How much tax revenue is lost when there’s no estate tax?

Around 1% of total Internal Revenue Service collections come from estate taxes.