This will be a boon for estate planners and tax lawyers. While there are rules on the books regarding basis and other tax issues, there is still much confusion in the tax world going forward. Thank you Harry Reid for you incompetence!

Well, technically it isn't significant to pull the plug on Jan 1 as much as pulling the plug 12-31-2010.

This will be a boon for estate planners and tax lawyers.

indeed.

What is going to be really tricky is the basis rules. Under the old regime, when someone died the basis of the decedent's assets were "bumped up", meaning if the decedent bought stock at $5 and it was worth $100 the beneficiary would take a stock basis of $100. If the beneficiary turned around and sold the stock immediately they would recognize no gain on the sale. Under the new regime in effect for 2010 only, an estate is allowed to $1.3 million in basis bump up allocation, and anything over that will be taxed using the decedent's basis. So now, when beneficiary takes the stock with a basis of $5 but worth $100 on today's market, that beneficiary has no incentive to sell other than the low cap gains rates. Add this dilemma to the new rules regarding Roth rollovers and the markets could take a huge hit this year.

Well, technically it isn't significant to pull the plug on Jan 1 as much as pulling the plug 12-31-2010.

That's assuming Congress doesn't pass something by then. Extremely ill wealthy individuals are going to have to keep an eye on Congress. If it looks like Congress is going to pass something mid-year they may want to resist any and all treatment in hopes of dying before any legislation is passed.

Tax,

To be clear on something, didn't you say that there would be no step up basis in 2010?

meaning that appreciated assets would be subject to all of the capital gain when transferred to beneficiaries???

This will be a boon for estate planners and tax lawyers.

With new tax legislation on the horizon (especially in the international field), bankruptcy, renogations of debt resulting from the poor economy, Stanford/Madoff, corporate acquisitions, and the estate tax fiasco, our tax group has been forced hire at least two, if not more, associates. We are slammed. Speaking of which I have to get to work.

didn't you say that there would be no step up basis in 2010?

Generally, an estate is allowed $1.3 mil of basis to be allocated amongst assets. So if you have an estate worth $1.3 mil or less, the rules are essentially the same for the beneficiaries under this regime as compared to the old regime. If you have an estate worth more than $1.3 mil then there will not be sufficient basis to be allocated amongst all assets and thus some assets may be subject to tax in the hands of the beneficiary based on a lower basis than that which was provided under our current rules.

Here is a link to the constitutional argument

"I have two clients on life support, and the families are struggling with whether to continue heroic measures for a few more days," says Joshua Rubenstein, a lawyer with Katten Muchin Rosenman LLP in New York. "Do they want to live for the rest of their lives having made serious medical decisions based on estate-tax law?"

Maybe I'm just old fashioned but what kind of POS would decide to pull the plug on grandpa because doing otherwise would mean a reduced inheritance?

It's sad but people make gut wrenching decisions in these types of instances all the time but typically do so when the choice is between financial ruin and treatment; not a choice between a massive inheritance or simply a large inheritance.

Maybe I'm just old fashioned but what kind of POS would decide to pull the plug on grandpa because doing otherwise would mean a reduced inheritance? -- #9 | Posted by katieberry

I think it's the other way around -- people are debating whether they should WAIT until Jan 1st to pull the plug, b/c that's when the estate tax expires. (For a year... and then comes back at a higher rate in 2011.)

That's what I get from the article, anyway.

Maybe I'm just old fashioned but what kind of POS would decide to pull the plug on grandpa because doing otherwise would mean a reduced inheritance?

~Katieberry

A family values republican?

Book value, of course.

Family is family but bidness is bidness.

Be Well.

Maybe I'm just old fashioned but what kind of POS would decide to pull the plug on grandpa because doing otherwise would mean a reduced inheritance?

I'm pretty sure it won't come to that.

I'm pretty sure it won't come to that.

What makes you so sure?

I'm pretty sure it won't come to that.

I dunno if I were old and rich I'd be doing everything I could to be VERY healthy come Dec 10

some severely ill wealthy individuals have been forced to make the macabre choice of fighting for life or avoiding taxes.

So life is worth less than money to these individuals.

Have been saying that for years.... what a sad philosophy on life.

Translate that to any social issue and you see the divide that occurs in the US.

Maybe I'm just old fashioned but what kind of POS would decide to pull the plug on grandpa

You only need look at a few posters on this site to see who places money over everything else.

BTW, look for Congress to fix this error come the new year.

To be clear on something, didn't you say that there would be no step up basis in 2010?

meaning that appreciated assets would be subject to all of the capital gain when transferred to beneficiaries???

That is correct.

If I was rich and ill I would pay some hitters to eliminate the family members gunning for my money.

If I was rich and ill I would pay some hitters to eliminate the family members gunning for my money.

you could try writing a will that directs your estate to go where you want it and remove the motive for your family members to off you.

oh, nevermind.

interesting how you would imagine your family wanting to do that to you.......

.....well, not really.

If I was rich and ill I would pay some hitters to eliminate the family members gunning for my money.

In Louisiana that is grounds for disinhersion.

BTW, look for Congress to fix this error come the new year.

Might not be constitutional.

interesting how you would imagine your family wanting to do that to you.......

Forget the fantasy that he's rich.

What about his fantasy that his family even knows he exists?

Republicans with a majority in both Houses of Conrgess and a Republican President didn't repeal the Estate Tax? Hmmmmmm........and yet they talk about it as if they hate it.

Sounds like Rich families will be holding their own 'DEATH PANELS'!

What are the odds Ted Kennedy was grandfathered into this ?

I wont leave one red cent, and should my accounting be off(not damn likely), I want govcorpco. to tax it extensively. 80% sounds fair for any estate over $250k.

Too bad logic and reason fail.
Again.

I just have a fundemental problem with working my ass off for 50-60 years so my children and grand children don't have too, and the government coming along when I die and taking what I have/had and handing it to the scumbag that broke into my store the week before. As for the ultra-rich like the Gates, Kennedy's, etc, their money is seldom held by individuals anyway. They are held by corporations and trusts which just keep being passed along. The families collectively hold the board seats and what taxes they do pay just get passed on to consumers. So in the end, it is the middle class taxpayer and small business owner that supports the whole system. What we need is a true progressive tax system. But that can only be successful if everyone has to pay something on every dollar they take in. And Democrats will never let that happen.

So in the end, it is the middle class taxpayer and small business owner that supports the whole system.

They don't pay estate taxes.

damn those evil rich people.... so evil... how dare they make lots of money and not give more of it away.

meanies....

I'm maxing everything out and doing a reverse mortgage stick that up your ass uncle sam!

estate ha ha ha ha... yeah right!

"I just have a fundemental problem with working my ass off for 50-60 years so my children and grand children don't have too, and the government coming along when I die and taking what I have/had and handing it to the scumbag that broke into my store the week before. As for the ultra-rich like the Gates, Kennedy's, etc, their money is seldom held by individuals anyway. They are held by corporations and trusts which just keep being passed along. The families collectively hold the board seats and what taxes they do pay just get passed on to consumers. So in the end, it is the middle class taxpayer and small business owner that supports the whole system. What we need is a true progressive tax system. But that can only be successful if everyone has to pay something on every dollar they take in. And Democrats will never let that happen.

#25 | Posted by bogey1355 "

YOU SPEAK THE TRUTH!!!

There is a big lesson here
Unless you don't give a dam about your inheritance and want to give it the Pigs in DC

Hang on: adjusting the basis is actually a huge gift of the taxpayers to the beneficiaries of the inheritance. There was capital gains tax still owed on the stock (for the gains it actually made) and that tax burden is taken away.

I just have a fundemental problem with working my ass off for 50-60 years so my children and grand children don't have too
I don't. If your children and grandchildren don't have to work, they're almost sure to become lazy ingrates.

So in the end, it is the middle class taxpayer and small business owner that supports the whole system. What we need is a true progressive tax system.
A progressive tax system, by definition, means the more you make the higher your tax rate. Is that really what you want?

Nice to know that we still have one group in America we can blame EVERYTHING on: Wealthy people
(oh and Bush, forgot about him)

I feel sorry for people that think they are somehow "entitled" to other peoples money. If you don't like being poor, get off your ass and do something about it...

If you don't like being poor, get off your ass and do something about it...
#34 | Posted by cmon | Flag: Moron

In keeping with a New Year's resolution I'm still mulling over, I wish to revise and extend my observation in #35 above by excising "Moron" and inserting "Overly Simplistic."

awe, and some how you think I care... Keep hating wealthy people and use them as your scape goat all year long... you will go far, especially with this administration!

happy new year

I'm guessing NONE of these wealthy people own businesses or hire people right??? they just kick back in their mansions and drink crystal while they mock the "little" guy...

Grow up!

Its unreal to me how these people talk about others peoples money as if it is somehow their own. The headline on this acts as if its some big profit by dying. Heres a hint, if youre dead, youre fucking dead, how the fuck can you profit from it? The dead person gets nothing save perhaps knowing that if he did happen to die in the year, the people who he cares most about will get what he worked his entire life for, and not half of it or less. I say good for them. Screw the government and screw you fuck nuts on here who think its normal to discuss what someone who just fucking died should be paying in taxes. Shows that most liberals just care about money and whos going to be paying for the next free thing that they all want. You are no better than what you sit there and claim to hate.

I'm guessing NONE of these wealthy people own businesses or hire people right??? they just kick back in their mansions and drink crystal while they mock the "little" guy...

What the hell does that have to do with anything?

Should they be given a magical pass from paying taxes because of that?

Ever think that the reason they are successful is because they live here in the US? You ever think that success is due to a business friendly enviroment that allows success?

Try and run a business in a third world shithole with unreliable roads, electricity, internet, workforce, bribe demanding officials and see just how successful you would be.

I just have a fundemental problem with working my ass off for 50-60 years so my children and grand children don't have too, and the government coming along when I die and taking what I have/had and handing it to the scumbag that broke into my store the week before

That is an awful good story grandpa, got any more fiction?

Most people with any money have already moved it offshore. It is kind of ironic that so many Dem funraisers like Steve Cohen and Ron Berkle have their hedge funds offshore. I set up an offshore account in 1998. Taxes are for the middle class. Suckers

#39 | Posted by THEBULL at 2009-12-31 10:08 AM | Reply | Flag:

This post shows you have no clue what you are talking about, especially when it comes to our tax regime.

I set up an offshore account in 1998.

You heard of the new FBAR rules?

Anyone here who feels like collecting a reward from the IRS could easily report you. Such whistleblowers get 10% of what the IRS collects from you.

Most people with any money have already moved it offshore.

define "any money". Because i know a lot of wealthy people who do nothing of the sort.

I set up an offshore account in 1998.

what is the minimum amount you can do that with?

Profit? These "evil rich people" have worked hard their whole lives to leave something behind for their families. They've already paid income tax on this money; the government shouldn't be taxing people to die. But I can see how you looters and moochers would be upset about this temporary lapse in the death tax.

#46 | Posted by John_Galt at 2009-12-31 11:00 AM | Reply | Flag

Again no understanding of the US tax regime. We tax transfers of wealth under our tax code. When someone dies, wealth is transferred, this is subject to tax. The legislators tax estates as a means of administrative ease - it's easier to collect taxes at the estate level rather than go after every beneficiary. Moreover, the assets passing through the estate receive a step-up in basis. This means the beneficiaries will receive assets valued at FMV as of the date of death. Thus, if the beneficiary turns around and immediately sells the asset they pay little or no tax on the sale. We could ignore this step-up in basis provision and make beneficiaries take the assets with a basis equal to the basis of the asset in the decedent's hands, this would generate a hefty tax at the beneficiary level. So as you can see, you have no clue what you are talking about. Next time you want to talk about an issue, do your research or learn a little about the topic you wish to discuss.

but this wont really work will it?
cant an oppresive govt still reach its tenticles back in time and tax shit the year before????????

cant an oppresive govt still reach its tenticles back in time and tax shit the year before????????

I am inclined to agree. It worked for retroactive telecom immunity, it could work here. Of course, in the case of telecom immunity, the government and the people with the money both wanted the same thing. This fight will be different (if it even comes to pass).

I'm guessing NONE of these wealthy people own businesses or hire people right??? they just kick back in their mansions and drink crystal while they mock the "little" guy...

What the hell does that have to do with anything?

Should they be given a magical pass from paying taxes because of that?

Ever think that the reason they are successful is because they live here in the US? You ever think that success is due to a business friendly enviroment that allows success?

Try and run a business in a third world shithole with unreliable roads, electricity, internet, workforce, bribe demanding officials and see just how successful you would be.

#40 | Posted by 726

what in the hell are you talking about!!! have you looked at the tax brackets? you dont think the wealthy pay "their fair share"???

"
Profit? These "evil rich people" have worked hard their whole lives to leave something behind for their families. They've already paid income tax on this money; the government shouldn't be taxing people to die. But I can see how you looters and moochers would be upset about this temporary lapse in the death tax.

#46 | Posted by John_Galt
"

yep, these dipshits are just lazy, jeleous or both.

"Again no understanding of the US tax regime. We tax transfers of wealth under our tax code. When someone dies, wealth is transferred, this is subject to tax. The legislators tax estates as a means of administrative ease - it's easier to collect taxes at the estate level rather than go after every beneficiary. Moreover, the assets passing through the estate receive a step-up in basis. This means the beneficiaries will receive assets valued at FMV as of the date of death. Thus, if the beneficiary turns around and immediately sells the asset they pay little or no tax on the sale. We could ignore this step-up in basis provision and make beneficiaries take the assets with a basis equal to the basis of the asset in the decedent's hands, this would generate a hefty tax at the beneficiary level. So as you can see, you have no clue what you are talking about. Next time you want to talk about an issue, do your research or learn a little about the topic you wish to discuss.

#47 | Posted by taxman
"

good info! hey taxman, how to these "estate" laws apply to the poor/middle class??? you think thats fair???

you think its fair just to apply it to someone who makes more then X or has more then X???

fair?

so let me see if i have this right... its wonderful to collect more taxes from people, but only if they are rich??? only taxes from rich people do good.

would we not be way further ahead if we just screwed everyone? more tax money would go to the govt for re-distribution?

guess i dont get it... oh well...

good info! hey taxman, how to these "estate" laws apply to the poor/middle class??? you think thats fair???

Poor people don't have "estates," idiot.

The operating paradigm for the middle class is "save enough that you die before the money runs out."

Why am I even talking to a sixth-grade educated moron like you? You make Goatman look like a Rhodes scholar.

Poor people don't have "estates," idiot.

YOU JUST MADE MY POINT!

thanks.

I'm only trying to understand why you think its ok to fuck over rich people?

if we were talking about fucking over minorities or the poor then its a problem. but when you are fucking over rich people its "progress".

oh, and I do have a degree, just never bought into the bull shit the professors tried to spoon feed me...

and dont tell me "fair share"... even a dumbass like me can look at the tax brackets and figure out who pays their fair share...

I'm only trying to understand why you think its ok to fuck over rich people?

You're an idiot, go piss up a rope.

I figured as much... thanks! your reply explains it all...

It's OK to persecute the rich, they deserve it right?

happy new year!